Investors boo Best Buy, cheer La-Z-Boy
Same-store sales drop at Best Buy, and investors slam the shares. La-Z-Boy's profit rebounds.
Updated 7:40 p.m. ET
The company said today that its first-quarter profit fell to $153 million, or 36 cents per share, down from $179 million, or 43 cents per share, in the same quarter last year.
Excluding charges, Best Buy posted earnings of 42 cents per share -- 8 cents higher than Street expectations.
That wasn't good enough for investors, who looked at declining same-store sales as a problem. Shares fell 7.3% to $35.84.
Revenue managed to rise 12% to $10.1 billion, but that was due to opening 185 new stores over the past year.
Sales at stores open at least 14 months were down 6.2%. Sanford C. Bernstein analyst Colin McGranahan told Bloomberg News that he'd expected a decline of 2.3%.
Consumers spent less on digital cameras and appliances during the biggest U.S. economic slump since the Great Depression.
Best Buy may not have benefited as much as investors hoped from the departure of Circuit City Stores, which closed its remaining 567 U.S. stores in March, McGranahan said.
Best Buy reaffirmed its full-year guidance of $2.50 to $2.90 per share.
"Domestic growth margin was up. We believe they're getting strong market share gains," Mitchell Kaiser, analyst at Piper Jaffray, told CNBC. "They're doing a better job managing inventory."
But the downside is that consumers just aren't spending, Kaiser said.
In May, Wal-Mart announced plans to revamp the electronics departments in more than 3,500 U.S. stores.
La-Z-Boy shares jumped 19.5% to $4.35.
La-Z-Boy earned $5.3 million, or 10 cents a share in the quarter, up from a loss of $4.4 million, or 9 cents a share, a year ago.
Excluding charges, the company said it would have earned 7 cents a share in the quarter. Analysts were looking for a loss of 11 cents.
Sales fell 23% to $284.5 million, missing Wall Street's estimate of $297.4 million.
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