You can almost hear investors breathe a sigh of relief after the troubled consumer electronics chain exceeded their modest expectations for the three months that ended on May 5. The company reported net earnings of $158M, down 25.5% vs the same period last year, on revenues of $11.6B, up 2.1%. Analysts had expected revenues to come in slightly lower, at $11.5B. The reported number would have been -4.3% were it not for an additional week included in this year’s Q1. But earnings from continuing operations — not counting restructuring charges — clocked in at 72 cents a share, beating forecasts for 59 cents. Best Buy made no change in the guidance for its performance in the current fiscal year. At domestic stores open at least a year, entertainment sales — including DVDs — fell 27.8%; the category now accounts for 9% of Best Buy’s domestic revenues, down from 13% this time last year. Consumer electronics sales were -5.4%, and now represent 34% of the domestic business. But computers and mobile phones were +3.6%; the lines account for 43% of domestic revenues. Appliances also were +8.9%. Calling Best Buy “in a turnaround,” interim CEO Mike Mikan says: “We know we have to better adapt to the new realities of the marketplace, and we are creating a long-term plan designed to make Best Buy more relevant with customers and position the company for sustained, profitable returns in the years ahead.”
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