Best Buy posts first-quarter earnings beat amid discretionary spending pressures

Best Buy Co. Inc. reported higher-than-expected net income in the first quarter and reaffirmed its full-year forecast, as gaming and services demand helped offset a drop in discretionary spending that has hit other retail competitors.

The retailer known for high-priced products such as televisions and computers reported adjusted net earnings of $1.15 per share for the three months ended April 29, above average analyst expectations of $1.11 per share.

Best Buy stock rose in premarket trade on Thursday.

The company, like many others, has been lowering prices as recent cost-of-living constraints drive many Americans to cut back on non-essential spending. Following that, total enterprise sales fell by little more than 11% to $9.47 billion, falling short of expectations.

Unlike big-box competitors like Target and Home Depot, Best Buy has maintained its fiscal 2024 projection. The business anticipates sales of $43.8 billion to $45.2 billion and unadjusted diluted earnings per share of $5.70 to $6.50.

Chief financial officer Matt Bilunas noted that the guidance assumes that the consumer electronics industry will continue to face headwinds, but added that a “high degree of uncertainty” still surrounds U.S. consumer sentiment.