Best Buy (BBY 57.06, +6.64) has spiked 13.2% in pre-market after beating expectations for the first quarter.
The electronics retailer reported above-consensus first quarter earnings of $0.60 per share on a 1.0% year-over-year increase in revenue to $8.53 billion, which was also ahead of expectations.
Enterprise comparable sales increased 1.6% thanks to growth in domestic and international sales. Domestic segment revenue grew 1.1% year-over-year to $7.91 billion while domestic comparable sales increased 1.4%. The increase in comparable sales was partially offset by the loss of revenue from closures of 12 large format and 40 Best Buy Mobile stores. Domestic comparable online sales grew 22.5%. Domestic gross margin improved to 23.6% from 23.0% one year ago.
International segment revenue increased 0.3% year-over-year to $616 million while international comparable sales grew 4.0%.
Best Buy CEO Hubert Joly noted that the company's upbeat quarter was driven by strong results in segments like gaming and mobile. The strength in gaming was supported by demand for the new Nintendo Switch handheld console.
There were some small changes in Best Buy's domestic revenue make up. Consumer electronics revenue held steady at 33.0% of total sales while computing and mobile phones sales made up 45.0% of total sales, down from 47.0% one year ago. Entertainment revenue increased to 7.0% of sales from 6.0% one year ago. Appliances revenue accounted for 10.0% of the total, up from 9.0% one year ago. Services revenue remained unchanged at 5.0% of total sales.
In the international segment, consumer electronics revenue held unchanged at 29.0% of total sales while other revenue held at 2.0% of total sales. Computing and mobile phone revenue accounted for 48.0% of sales, down from 50.0% one year ago. Entertainment revenue increased to 7.0% of total sales from 6.0% one year ago. Appliances revenue made up 7.0% of sales (from 5.0% one year ago) while Services revenue also made up 7.0% of total sales (from 8.0% one year ago).
Looking ahead, the company expects second quarter earnings between $0.57 per share and $0.62 per share. Second quarter revenue is expected between $8.60 billion and $8.70 billion. Enterprise comparable sales growth is expected between 1.5% and 2.5%. Domestic comparable sales growth is also expected between 1.5% and 2.5%.
For the full year, the company expects enterprise revenue growth of 2.5% and enterprise operating income growth between 1.5% and 5.5%.