On a comparable-store basis, sales declined 6.2%, with the worst declines seen in May. (Last May, consumers were busy spending at least some of those stimulus rebates on electronics.) Net earnings fell 15% to $153 million, but still came in slightly ahead of analyst expectations.
The company also says that it cut advertising expenses during the fiscal quarter, "some of which will be offset in the balance of the fiscal year."
In the U.S, comparable-store sales fell 4.9% for the quarter, which the company says is due not only to less traffic, but also to "an essentially flat average ticket and reflected decreases in gaming, digital cameras, appliances and movies." Those declines were somewhat offset, it says, by an increase in sales of notebook computers, mobile phones and repair services, as more customers look to extend the life of products they already own.
On a comparable-store basis in the U.S., sales of consumer electronics fell 7.6%, entertainment software dropped 20.6%, and appliances sank 20.1%. In the home office category, sales jumped 9.5%, while sales of services -- including its Geek Squad -- gained 1.7%.
Domestic market share increased about 200 basis points for the quarter, led by notebook computers, flat-panel televisions, digital imaging and mobile phones. The company continues to benefit from the demise of Circuit City, which filed for bankruptcy back in November, but still faces stiff competition from Wal-Mart Stores, Target, and other national chains.
"Our first-quarter results reflect strong execution of our strategy in a difficult consumer environment," the company says in its release, standing by earlier forecasts for the remainder of the year. "We are pleased to report that the year is off to a good start."
The company has said that "connected digital solutions" are a key part of its growth strategy, and adds that it continued "to see strong revenue and growth in mobile phones as a result of the expansion of Best Buy Mobile," increasing its domestic market share in mobile phones by approximately 100 basis points. (Last month, the company announced a new Napster product, for music downloads.)