Best Buy reported strong first quarter earnings Thursday, a sign the company has been able to pass along the effects of tariffs to consumers. Here are some takeaways:
• Higher prices boost sales: Comparable sales at U.S. stores rose 1.3% and executives said the biggest gains came in appliances, wearables and tablets. All three of those categories have products in them that were affected by tariffs the U.S. imposed on China that resulted in price increases. If tariffs on Chinese imports rise further next month as expected, the company’s ability to pass on the effects will be tested.
• Great Call makes a difference: Best Buy’s results included the performance of GreatCall, its largest-ever acquisition and a business that provides services and devices for older adults. The addition of the business helped offset the comparative decline associated with last year’s closure of 12 large-format Best Buy stores and 105 Best Buy Mobile stores.
• Digital is also paying off: Best Buy said online sales increased 14.5% to $1.31 billion, which represented 15.4% of total U.S. revenue.
• Leadership change is on track: Corie Barry, the company’s chief financial officer, will succeed Hubert Joly as chief executive on June 11. The change was announced last month. In Thursday’s earnings announcement, Joly’s last, he said, “I am very proud of the seamless transition we have decided to implement, as it reflects positively on our momentum as well as our focus on executive development and succession planning.”