(Reuters) -Best Buy Co Inc on Thursday beat first-quarter profit estimates and posted a smaller-than-expect drop in comparable sales as deep discounts lured in budget-conscious customers looking for cheaper deals on TVs and laptops.
Shares of the top U.S. electronics retailer were up 5% in premarket trading as Best Buy joined a small group of retailers in maintaining full-year profit and revenue forecasts.
Discretionary goods retailers have been offering steeper discounts in a bid to counter an inflation-led weakness in demand for TVs, laptops and other electronic products.
Best Buy’s adjusted net earnings stood at $1.15 per share in the quarter ended April, above the average analyst estimate of $1.11 per share, according to IBES data from Refinitiv.
The results come at a time when several other major retailers have taken a cautious approach in their outlook as economic uncertainties weigh on consumer spending on discretionary items.
Last week, Home Depot and Target Corp maintained their expectations for 2024, as inflation-hit Americans turn away from spending on non-essential goods.
Best Buy expects comparable sales to decline in the range of 6% to 8% in the second quarter as customers remain cautious amid strong inflation and higher interest rates.
“Customers are clearly feeling cautious and making tradeoff decisions as they continue to deal with high inflation and low consumer confidence,” said Chief Executive Officer Corie Barry.
Best Buy logged a smaller-than-expected decline in comparable sales of 10.1% in the first quarter, compared with analysts’ average estimate of a 10.3% fall.
(Reporting by Savyata Mishra in Bengaluru; Editing by Shinjini Ganguli)