May 28 (Reuters) - U.S. electronics retailer Best Buy forecast second-quarter sales above Wall Street expectations after beating Q1 estimates on Thursday, amid steady demand for laptops and smartphones and growth in its ads and marketplace channels.
CEO Corie Barry is set to step down at the end of October and will be succeeded by Jason Bonfig, a company veteran who is expected to focus on expanding its higher-margin advertising and marketplace businesses.
Shares of the company, which are down about
10% over the past 12 months, rose more than 6% before the bell.
The company has been doubling down on offerings such as Geek Squad support and paid memberships, as shoppers prioritize upgrading and replacing essential gadgets even as they remain selective about big-ticket purchases.
Best Buy has been "scaling new profit streams like Best Buy Ads and Marketplace that we expect to provide considerable benefit over time," Barry said.
Comparable sales rose 2% in the quarter ended May 3, rebounding from a 0.7% drop a year earlier and above analysts' expectation of about 1%, according to data compiled by LSEG.
Sales growth in May rose at a high-single-digit pace but is expected to slow to about 1% for the second quarter following last year's strong Nintendo Switch 2 launch, CFO Matt Bilunas said. The outlook is still stronger than analysts' expectation of a 0.4% decline.
The retailer maintained its fiscal 2027 forecast of comparable sales in the range of a 1% decline to a 1% rise, with adjusted profit per share between $6.30 and $6.60.
SHIFT TO HIGHER-MARGIN BUSINESSES
Incoming CEO Bonfig outlined plans to sharpen focus on the company's retail, media and technology platform, expand its reach through marketplace offerings and enhance the customer experience.
The push comes amid choppy consumer demand and the company's reliance on electronics replacement cycles.
It has also been ramping up imports of computers and other electronics to offset rising memory costs as a global shortage tied to AI-led demand drives up component prices.
It reported first-quarter earnings of $1.28 per share, beating analysts' estimate of $1.23 per share.
(Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)
