MINNEAPOLIS — Best Buy Co., the nation's largest consumer electronics retailer, said Tuesday that cost cutting and sales of big-ticket items powered a 38% increase in fiscal first-quarter profit .
Its shares jumped more than 5%.
Best Buy earned $234 million, or 47 cents a share, in the three months ended May 27, up from $170 million, or 34 cents, during the same period last year. Analysts surveyed by Thomson Financial were expecting 36 cents a share.
Revenue jumped almost 14% to $6.96 billion from $6.12 billion.
Sales at stores open at least 14 months grew 4.9%. Best Buy said the gain was driven by an increase in the average size of each transaction, as customers spent more on flat-panel televisions, music players and laptop computers. Sales of older televisions, music, desktop computers and printers all declined.
The company also said consumers bought more at its website, and online revenue grew more than 30%.
The growth came despite economic headwinds such as rising interest rates and gas prices. Retailers have been nervously watching to see whether customers would spend less. Best Buy's comparable-store sales gain was down from the fourth quarter's 7.3% because of those factors, said Darren Jackson, chief financial officer.
After criticism this year for run-ups in spending on advertising, headquarters and corporate expenses, Best Buy has said it wants to reduce the growth of such spending by $300 million to $350 million over the next two years. It laid off 300 people at its Richfield, Minn., headquarters in April.
On Tuesday it said it had made a short-term reduction in advertising spending and had reduced spending on travel. And at the suggestion of a group of store managers, it cut the number of assistant managers at most stores from seven to five.
"This quarter suggests that we're off to a good start," Jackson said.
The company reiterated its earnings guidance of $2.65 to $2.80 a share for the full year. Analysts are looking for $2.72 a share for the year.
Best Buy shares rose $2.66, or 5.4%, to $51.69. They have traded in a 52-week range of $38.92 to $59.50.