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Best Buy sees laptop upgrades driving demand recovery; tops Q1 profit estimates

Best Buy said on Thursday it expected sales in its key computing category to improve this year on renewed demand after its quarterly profit beat Wall Street estimates, benefiting from its membership program and cost-saving efforts.

The company’s shares rose 10% after the electronics retailer also reaffirmed its full-year forecasts.

Demand for artificial intelligence-enabled laptops as well as higher-end televisions is helping Best Buy regain lost ground on sales in the country as consumers look to upgrade or replace their gadgets after more than two years of restraint on spending on electronics.

The company is also banking on the launch of Microsoft’s AI-powered Copilot+ PCs, which are expected to go on sale on June 18.

Best Buy CEO Corie Barry said on a post-earnings call that the company expects to have more than 40% of the product assortment at launch exclusive to the company.

“We know more of our key categories will return to growth that historically we outperform when there is more technology innovation,” Barry added.

The company has also benefited from people signing up for its two-tiered membership program, which it refreshed last year, helping the top electronics retailer in the United States retain shoppers and drive better margins.

First-quarter adjusted earnings per share of $1.20 beat expectations of $1.08, according to LSEG data.

Best Buy maintained its annual comparable sales forecast of flat to a decline of up to 3%, and CFO Matt Bilunas said the company believes it was trending towards the midpoint of that range on sequential improvement in sales.

“The company is managing profitability well with benefits from its paid membership program, services sales growth and expense cuts,” Wedbush analyst Seth Basham said, adding that Best Buy maintaining its annual forecasts was a positive.

Best Buy reported a 6.1% fall in quarterly comparable sales, while analysts expected a drop of 4.94%. Reuters

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