Best Buy Shares Sink After Weak Guidance

Best Buy Co. Inc. shares dropped 6.1% in Tuesday premarket trading, after the electronics retailer said it sees second-quarter earnings below consensus. The company reported first-quarter net income of $229 million, or 70 cents per share, up from $129 million, or 36 cents per share, for the same period last year. Adjusted earnings per share were 44 cents, exceeding the FactSet consensus of 35 cents. Revenue totaled $8.44 billion, down from $8.56 billion last year but exceeding the FactSet consensus of $8.29 billion. Domestic same-store sales were flat, above the guidance of a 1% to 2% decline, driven by year-over-year sales growth in health and wearables, home theater and appliances. The growth was offset by softness in mobile phones and tablets, said Chief Executive Hubert Joly in a statement. Best Buy sees second-quarter revenue between $8.35 billion and $8.45 billion, above the $8.31 billion FactSet consensus, and second-quarter adjusted EPS between 38 cents and 42 cents, below the 50 cents per share FactSet consensus. The company reaffirmed its previous full-year outlook for approximately flat revenue because the first quarter only represents 15% of full-year earnings "and at this stage we have no new material information as it relates to product launches throughout the year," said Joly. Best Buy shares are up 8.4% for the year so far, but down 3.9% for the past year. The S&P 500 is up 0.2% for the year to date.