Best Buy 1Q Profit Falls, but Beats Expectations

Minneapolis Best Buy says its profit fell 7% in its first quarter but it still beat Wall Street's expectations because of a lower share count and a rise in revenue.

The retailer said Tuesday it earned $179 million, down from $192 million a year ago.

Best Buy Co. Inc. says revenue jumped 13% to $8.99 billion. Analysts expected $8.57 billion.

Same-store sales rose 3.7% at stores open at least 14 months. The company said the gain "accelerated in the second half of the quarter and remains solid thus far in early fiscal June." The increase was driven by customers who bought higher-priced items such as flat-panel TVs, video gaming consoles, notebook computers and GPS devices.

The company expects revenue of $43 billion to $44 billion in fiscal 2009. Analysts had been predicting revenue of $43.90 billion. The company expects same-store store sales for the year to grow 1% to 3%.

Best Buy lowered its new store plans for China for the year. It now plans to open eight to 16 Five Star stores and one to three Best Buy stores. Previously it had planned 20 to 25 Five Star openings and five to eight Best Buy openings.

"While we are working through the timing of our store openings, our commitment to China as a growth market is unwavering," said Bob Willett, CEO for Best Buy International and chief information officer.