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Gap beat quarterly estimates on the top and bottom lines, leading the retailer to raise its full-year guidance.
The apparel company’s CEO Richard Dickson told CNBC, “we’re delivering what we said we were going to deliver to our shareholders.”
All four of Gap’s brands — its namesake banner, Old Navy, Athleta and Banana Republic — posted positive comparable sales for the first time in years.

A Gap store in New York, US, on Monday, May 27, 2024. Gap Inc. is scheduled to release earnings figures on May 30. 
Bloomberg | Bloomberg | Getty Images

Gap posted positive comparable sales at all four of its brands on Thursday, leading the apparel giant to raise its full-year guidance as CEO Richard Dickson’s turnaround strategy starts to take effect. 
The retailer behind Gap, Banana Republic, Athleta and Old Navy blew past earnings estimates and beat on revenue, too. 

Here’s how Gap did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 41 cents vs. 14 cents expected
Revenue: $3.39 billion vs. $3.29 billion expected

Gap shares spiked more than 20% in extended trading Thursday.
The company reported fiscal first-quarter net income of $158 million, or 41 cents per share, compared to a loss of $18 million, or 5 cents per share, in the year-earlier period. 
Sales in the period ended May 4 rose about 3% to $3.39 billion from $3.28 billion a year earlier.
It’s “the first time that all four brands have reflected positive comps in many years. In fact, we were sort of looking for when they had and it was difficult to find,” CEO Richard Dickson told CNBC in an interview.

“We’re feeling very confident about our quarter and it has given us the confidence to raise our guidance for full year 2024, both the outlook for revenue and operating margin. … It continues, if you will, to really demonstrate our confidence that our priorities are really taking shape,” he added. “The culture is being energized and we’re delivering what we said we were going to deliver to our shareholders.” 
Gap is now expecting net sales to be up “slightly,” compared to its previous forecast of flat. The company is expecting gross margins to grow by at least 1.5 percentage points, compared to earlier guidance of at least a half a percent.
The biggest change to Gap’s forecast is in its operating income outlook. It now expects operating income to be in the mid-40% growth range, compared to previous guidance of low-to-mid teens growth. 
Dickson, who took the helm of Gap in late August, is a marketing guru who has been working to reinvigorate the company’s portfolio of brands. His work has focused on brand storytelling and positioning names like Gap and Old Navy back into the center of culture.
Some of that has already started to show up. 
Earlier this month, actress Da’Vine Joy Randolph wore a denim ball gown designed by Gap’s new creative director, Zac Posen, to the Met Gala in Manhattan. A few weeks later, actor Anne Hathaway sported a white Gap shirt dress to a Bulgari party that had also been designed by Posen. 
“We were so excited to see [Hathaway’s dress] in the marketplace and also dropped to consumers so that they had an opportunity to buy it,” said Dickson. “We continue to believe again, that the better storytelling through marketing and innovative media is resonating.” 
He told CNBC the quarter’s success was driven “by consistency and financial and operational rigor,” adding the company’s average selling prices are back to pre-pandemic levels thanks to leaner inventory levels that are leading to better sell throughs. But with better designs and marketing, consumers are just buying more, too. 
Here’s a breakdown of how each of Gap’s banners performed during the quarter, compared with Wall Street estimates compiled by FactSet, which revised its estimates after Gap’s report:

Old Navy: Net sales of $1.9 billion were up 5% compared to last year while comparable sales were up 3%, ahead of the 2.3% uptick expected according to the revised FactSet estimate. Dickson said the brand saw its “highest quarterly comp in three years” — a major win for Gap’s most important brand by revenue. He noted there was strength in the women’s business and “positive results in active” – a “key category” for the company. 

Banana Republic: Sales of $440 million rose 2% compared to last year. Comparable sales were up 1%, well ahead of the 4% decline expected, according to the revised FactSet estimate. The growth also comes on top of an 8% decline in the year-ago period.   

Athleta: Sales of $329 million climbed 2% compared to last year. Comparable sales were up 5% after being down a staggering 13% in the year-ago period. Analysts didn’t have expectations for Athleta’s comparable sales.  

Gap: Sales of $689 million were flat compared to last year. Comparable sales were up 3%, ahead of an expected 2% gain, according to the revised FactSet estimate. “Gap’s performance was primarily driven by strong marketing and product execution centered around its Linen Moves campaign,” the company said.

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Ulta Beauty reported on Thursday fiscal first-quarter earnings that showed the effects of a slowdown its CEO had previously warned about.
Comparable sales, a metric that tracks Ulta stores open at least 14 months along with online sales, increased 1.6% year over year, a stark slowdown from the same period a year earlier.
Ulta Beauty has been a strong performer for retailers as they face a consumer pullback in light of persistently higher costs.

Ulta Beauty
Chicago Tribune | Tribune News Service | Getty Images

Ulta Beauty on Thursday laid out plans to boost sales and gain market share after a first-quarter sales slowdown.
Comparable sales, a metric that tracks Ulta stores open at least 14 months along with online sales, increased 1.6% year over year, a stark slowdown from the same period a year earlier when Ulta reported comparable sales growth of 9.3%

“We expect growth to accelerate in the second half of the year, to be between 2% and 4% reflecting the impact of our sales-driving initiatives,” finance chief Paula Oyibo said during the company’s earnings call.
Ulta CEO Dave Kimbell in April warned of cooling demand in the beauty category at an investor conference. And while the slowdown was largely anticipated, Kimbell said it hit the company “a bit earlier and bit bigger” than expected.
Kimbell on Thursday acknowledged market share has been challenged in the past quarters, particularly within the prestige beauty category.
“We are not satisfied with our market share trends and we’re taking actions to reinforce our leadership position and accelerate growth,” Kimbell said during the earnings call, adding the company will share further long-term plans at its analyst day in October.
Kimbell outlined five key areas in which the company is planning on taking concrete action: strengthening assortment through 25 new brands including Ulta-exclusives with celebrities like Serena Williams and Bella Hadid; accelerating social relevance through scaling its creator network; enhancing the consumer digital experience; leveraging the loyalty program; and evolving promotional levers.

The company will also expand its partnership with delivery service DoorDash, where it offers same-day delivery from its stores, and lean in on their app adoption. The Ulta app accounted for 57% of e-commerce sales in the quarter, Kimbell said.
Kimbell also announced the company is testing new gamification platforms and later this year will activate new marketing technology that will help guests personalize their shopping experience.
Shares of Ulta gained about 11% in extended trading Thursday.
Here’s how the beauty company performed during the period compared to what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: $6.47 vs. $6.24 expected
Revenue: $2.73 billion vs. $2.72 billion expected

Ulta reported net income for the quarter ended May 4 of $313.1 million, or $6.47 per share, compared with $347.1 million, or $6.88 per share, a year earlier. 
Net sales rose slightly to $2.73 billion from $2.63 billion a year earlier.
The company lowered its guidance for the fiscal year. Ulta reported that it is now expecting net sales in the range of $11.5 billion to $11.6 billion and comparable sales in the range of 2% to 3%. It had previously guided to full-year net sales of $11.7 billion to $11.8 billion and comparable sales of 4% to 5%.
Ulta also revised its full-year earnings per share guidance to a range of $25.20 to $26, down from its previous guidance of $26.20 to $27.
Ulta Beauty has been a strong performer for retailers as they face a consumer pullback in light of persistently higher costs. Beauty brand e.l.f recently reported its first billion-dollar fiscal year, blowing past Wall Street estimates and sending shares soaring.
Artificial intelligence-powered beauty company Oddity Tech recently told CNBC the industry isn’t seeing so much a slowdown but rather a shift in the business.
“What we do see is an industry that’s transforming. So the consumer is moving online and the consumer is moving to high-efficacy products that really solve their problems,” Oddity finance chief Lindsay Drucker Mann told CNBC.
The Wall Street view of Ulta has been cooling ahead of the company’s earnings report, with analysts at Baird and Canaccord Genuity lowering their price targets in recent days.
“We believe the beauty category is resilient. Despite reduced spending on discretionary items, consumers continue to prioritize beauty products, leading to significant growth in this category,” analysts at Jane Hali & Associates said in a recent note on Ulta, adding that although they view the wellness category as a key strength, they are cautious on the makeup category.
Shares of the company closed at $385.58 per share on Thursday, bringing the company’s market value to about $18.5 billion.

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Nordstrom missed quarterly estimates but stuck by its full-year forecast.
The company’s off-price chain Rack outperformed its banner stores.
The Nordstrom family is considering taking the company private.

A Citi Bike docking station outside the Nordstrom flagship store in New York on Feb. 21, 2024.
Bing Guan | Bloomberg | Getty Images

Nordstrom on Thursday fell short of Wall Street’s quarterly earnings expectations as its off-price chain Rack outperformed the rest of its stores.
Despite the earnings miss, the Seattle-based department store operator posted sales growth and stuck by its full-year forecast.

Here is what the retailer reported for its fiscal first quarter compared to what Wall Street was expecting, based on a survey of analysts by LSEG:

Loss per share: 24 cents vs. 8 cents expected
Revenue: $3.34 billion vs. $3.20 billion expected

Nordstrom shares slid about 7% in extended trading.
Nordstrom has leaned on its off-price chain, Nordstrom Rack, to drive growth. It has been opening more Rack stores, including nine during the quarter. It is on track to open a total of 22 new Rack stores this year.
Yet, Rack, which offers brand names at cheaper prices, has lagged behind rivals such as TJX-owned T.J. Maxx and Marshalls.
In the quarter, however, the off-price chain showed signs of progress. It outperformed Nordstrom’s flagship brand with comparable sales rising 7.9% year over year. Comparable sales for the company’s flagship brand climbed 1.8%.

The retailer reaffirmed that it expects earnings of $1.65 to $2.05 for the full fiscal year. Nordstrom anticipates full-year revenue will be in a range of a 2% decline to 1% growth from the prior year.
For its fiscal first quarter, Nordstrom posted a net loss of $39 million, versus a net loss of $205 million in the prior-year period. The company’s total revenue rose to $3.34 billion from $3.18 billion in the previous year.
Sales of activewear led the company’s performance in the quarter with double-digit growth, as customers bought clothing and shoes from brands including Adidas, Vuori and Hoka, President Pete Nordstrom said on the company’s earnings call.
Kids’ and women’s apparel also had double-digit growth and beauty sales increased by high single digits, the company said.
The results come as the Nordstrom family again considers taking the company private. Last month, it said it formed a special committee to evaluate bids.
The company’s quarterly results Thursday were the first since former chairman Bruce Nordstrom, the father of CEO Erik Nordstrom and Pete Nordstrom, died earlier this month.
Nordstrom, similar to its department store rivals, is trying to win over young consumers as it relies on aging customers.

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The FDA has approved nearly 600 radiology artificial intelligence and machine learning programs and devices over the last five years, but most aren’t covered by insurance.
Medical associations and regulators are taking a cautious approach to designating new programs for reimbursement.
Startup Avenda Health has received a provisional code for its prostate cancer screening, but its CEO worries the slow path to insurance reimbursement will impede adoption of the technology
Without a billing code, radiology provider RadNet charges patients a cash fee to access its AI-enhanced breast cancer screening program

Artificial intelligence for cancer screening has taken off.
Yet most of those new programs aren’t covered by Medicare or private insurers, which creates headwinds for companies looking to boost adoption and for patients who could benefit from the new technology.  

“Traditionally, for medical devices it takes up to seven years after a product that’s approved by the FDA to get reimbursed. So, it is quite a challenge,” said Brittany Berry-Pusey, co-founder and COO of AI screening startup Avenda Health.
As AI capabilities accelerate, the Food and Drug Administration has authorized 882 AI and machine learning-enabled devices and programs. Nearly 600 of them have been radiology AI applications approved in the last five years. Most do not yet have billing codes that would allow them to get reimbursement and prevent patients from paying out of pocket.
While some tools have shown early promise in helping to improve diagnosis and care for cancer patients, more data may be needed to determine whether they are more effective than conventional screening before major insurers will be willing to cover them.

A medical robot of French start up SquareMind, designed to facilitate cancer screening using artificial intelligence is displayed during the Vivatech technology startups and innovation fair, at the Porte de Versailles exhibition center in Paris, on May 22, 2024.
Julien De Rosa | Afp | Getty Images

One of Avenda’s products illustrates the complex process that has to take place before insurers cover AI tools.
The company’s Unfold AI prostate cancer platform helps urologists find more cancer cells than traditional MRI screenings. It can aid in identifying the best treatment to reduce the risk of prostate cancer surgery side effects like incontinence and impotence.

The FDA approved the program for medical decision support last year. Just as important, the American Medical Association designated a provisional billing code for it — which most AI radiology products have not yet received.
Now, Avenda is working on getting Medicare and insurers to provide coverage, which can take years in many cases.
“If there’s no payment, that means patients have to pay out of pocket, which can be challenging … especially for our patients. This is an older patient population,” said Berry-Pusey.

Hurdles to reimbursement

The American Medical Association, the medical professional organization that assigns the Current Procedural Terminology codes that allow reimbursement, issued guidelines for establishing AI CPT codes last fall. The group said different medical specialties should help determine the standards for use in their fields.    
The lack of reimbursement is hindering adoption of new AI programs for cancer screening, especially for smaller hospitals and physician practices, said Dr. William Thorwarth, CEO of the American College of Radiology, which represents thousands of professionals in the field. Yet, in a letter to a congressional committee assessing the use of AI in health care, he cautioned against moving too quickly.
Thorwarth wrote that AI reimbursement is complex and establishing billing codes for every approved AI tool is “problematic.”  He added that it is “unclear” whether the AI platforms currently covered are “adding value to patients or the health system.”
Medicare and private health insurers have expressed similar caution. A spokesperson for the Centers for Medicare & Medicaid Services told CNBC that the agency takes CPT codes into account for reimbursement and “continually assesses opportunities to leverage new, innovative strategies and technologies safely and responsibly, including Artificial Intelligence.”
Part of that caution may stem from an earlier experience with computer-aided mammography in the late 1990s. Doctors since have said it led to false positives and unnecessary biopsies.  
Independence Blue Cross Chief Medical Officer Dr. Rodrigo Cerda said the verdict is still out on the effectiveness of the newest programs.
“The evidence hasn’t quite met the bar to say it clearly makes a benefit of positive difference for our members and doesn’t introduce other risks that might be false positives or sort of gives confidence to the false negatives,” Cerda said.

Charging patients out of pocket

Without insurance reimbursement, radiology provider RadNet has resorted to charging patients a fee for its proprietary Enhanced Breast Cancer Detection AI screening, which was launched in 2022. RadNet has published data indicating the tool helps to improve cancer detection.
The company recently cut the price of the test from $59 to $40. It said its AI digital health revenue more than doubled in the first quarter from a year ago, and patient adoption of AI screening increased from around 25% to 39% of mammogram patients.
RadNet’s executives compare the process with AI screening to the radiology industry’s experience with digital breast Tomosynthesis, known as 3D mammography. It was approved by the FDA in 2011, and women were initially offered the screening for an out-of-pocket fee. By the end of the decade, it was widely covered by insurers.
“The question is, can we eventually get the [insurers] to step up for that? And I think driving the adoption and the value propositions of finding more cancers, I think will eventually convince them,” said Dr. Greg Sorensen, RadNet’s chief science officer.  
Sorensen said RadNet has enrolled an employer in New Jersey, which will start covering the breast cancer scans for its workers.
The company will also soon launch an AI-enhanced prostate MRI screening for $250. But at that price, it may pose a bigger barrier to adoption — and access for patients who can’t afford it.

Concerns about access

UCLA neurology professor Josh Trachtenberg was willing to pay for an AI prostate cancer screening, which he feels made a world of difference to his own care.  
Trachtenburg says when he was diagnosed with prostate cancer last year, several doctors told him he would need to have his prostate removed, a procedure that would have left him with incontinence and impotence problems.
He turned to a urologist at the UCLA medical school who was using Avenda Health’s Unfold AI program. The program more accurately measured the scope of his tumor, which allowed the doctor to get at the cancer cells in surgery while preserving healthy tissue.
Trachtenberg worries that patients who can’t afford the extra costs for certain AI tools will pay the price with poorer outcomes.
“I think most men who aren’t faculty in a medical school … are just put through the meat grinder because that’s what insurance covers and that’s the ‘go to’ procedure,” he said.
Avenda Health’s Berry-Pusey worries that patients will lose out on new technologies altogether because the uncertainty of reimbursement could stymie funding for innovation.
“As a startup, we’re always looking for investors, and so making sure that there is a clear path to revenue — it’s important for us to survive,” she said.  
Investors are backing health-care AI developers despite the payment hurdles. Alex Morgan, a partner at Khosla Ventures, is upbeat about the sector, and recently participated in large funding round for a radiology AI firm.
“If you just have a human do a bunch of activities, and then you stick AI on … you’re not getting any efficiency gains,” Morgan said, adding that the key to getting paid is to “provide differentiated, powerful outcomes.”
He said that in the end, the technology that improves the quality of care and outcomes for patients will win out.
Correction: Brittany Berry-Pusey is the COO of Avenda Health. An earlier version of this story misstated her position. More

Pending home sales in April fell to their slowest pace since April 2020.
Sales were down in every region of the country, but they fell hardest in the Midwest and West.
Higher mortgage rates had an effect: The average rate on the 30-year fixed mortgage ended March at around 6.9% and then took off, hitting 7.5% by the end of April, according to Mortgage News Daily.

A “sale pending” sign is posted in front of a home for sale in San Anselmo, California, on Nov. 30, 2023.
Justin Sullivan | Getty Images News | Getty Images

Signed sales contracts on existing homes dropped 7.7% in April compared to March, the slowest pace since April 2020, according to the National Association of Realtors.
These so-called pending sales are a forward-looking indicator of closed sales one to two months later. Pending sales were 7.4% lower than in April of last year.

Sales were expected to be flat compared to March.
Since the count is based on signed contracts, it shows how buyers are reacting to mortgage rates in real time. The average rate on the 30-year fixed mortgage ended March at around 6.9% and then took off, hitting 7.5% by the end of April, according to Mortgage News Daily.
With home prices still climbing and supply very low, leading to increased competition, that jump in rates had a huge effect on sales.
“The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market,” said Lawrence Yun, chief economist for the NAR. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
Sales were down in every region of the country, but they fell hardest in the Midwest and West. The former has some of the most affordable markets in the nation, and the latter has some of the most expensive.

“The prospect of measurable home price declines appears minimal. The few markets experiencing price declines will be viewed as second-chance opportunities for buyers to enter the market if those regions continue to add jobs,” Yun added.
Perhaps in reaction to the slow sales pace in April, the share of sellers cutting prices in May hit 6.4%, the highest level since 2022, according to a new report from Redfin. The median asking price also dropped for the first time in six months.
Active inventory in April was 30% higher than in April 2023, according to Realtor.com, which suggests the summer market could be more active than last year.
“Though inventory and prices are moving in a more buyer-friendly direction, lower mortgage rates will be crucial in bringing both buyers and sellers back into the market,” said Hannah Jones, senior economic research analyst with Realtor.com.

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Foot Locker on Thursday posted better-than-expected comparable sales as CEO Mary Dillon’s turnaround plan shows signs that it’s beginning to bear fruit.
The former Ulta boss said average selling prices increased during the quarter, proving that consumers are willing to pay full price for the right product.
The sneaker company has been working to reverse an ongoing sales slump by revamping its stores and winning back brands.

Foot Locker’s turnaround is starting to bear some fruit. 
The sneaker giant saw comparable sales decline 1.8% during its fiscal first quarter, far better than the 3.1% drop-off that analysts expected, according to StreetAccount. 

The company also reaffirmed its fiscal year guidance, which projects sales to be between a 1% decline and a 1% gain, compared with a decline of 0.6% that analysts had forecast, according to LSEG. 
Here’s how the company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 22 cents adjusted vs. 12 cents expected 
Revenue: $1.88 billion vs. $1.88 billion expected

Foot Locker’s reported net income for the three-month period that ended May 4 was $8 million, or 9 cents per share, compared with $36 million, or 38 cents per share, a year earlier. Adjusting for one-time items, including impairments associated with certain store closures and restructuring, among other costs, Foot Locker reported earnings of 22 cents per share.
Sales dropped to $1.88 billion, down about 3% from $1.93 billion a year earlier. 
For the full year, Foot Locker expects adjusted earnings per share to be between $1.50 and $1.70, ahead of estimates of $1.57, according to LSEG. 

The company is expecting comparable sales growth of between 1% and 3%, ahead of the 1.5% growth that analysts had expected, according to StreetAccount. 
“We had a solid start to the year in the first quarter, which demonstrates that our Lace Up Plan is working,” CEO Mary Dillon told CNBC in an interview. “The reason I feel confident — we’re launching an enhanced FLX rewards program, so we have a lot of opportunity with rewards. We’re launching a revamped mobile app, which we know is a great way to drive customer engagement and commerce and we see growth opportunities … with all of our brand partners throughout the year, including returning to growth with Nike in the holiday quarter.” 

Dillon, the former CEO of Ulta Beauty, has been working to turn Foot Locker around, but those efforts have taken longer than expected. 
Sales have consistently fallen as the retailer contends with a low-income consumer who has felt the brunt of inflation more acutely than other shoppers.
The company is also contending with mercurial brand partners, such as Nike, which has pulled back on the number of new releases to Foot Locker’s stores. In April, Nike CEO John Donahoe acknowledged that the brand went too far when it iced out wholesalers in favor of its own stores and website. Donahoe told CNBC that Nike is “investing heavily with our retail partners” as it goes through its own turnaround effort. 
Foot Locker’s Champs Sports banner has also been weighing down the overall business, with comparable sales down a staggering 13.4% during the quarter and overall revenue down almost 19%.
Foot Locker had to rely on promotions to drive sales and has lost Wall Street’s confidence, with shares down about 28% year to date as of Wednesday’s close. 
However, things are starting to look up for the company. 
While Foot Locker’s core consumers are still under pressure from inflation, Dillon said the company’s average selling price rose during the quarter, proving that its consumers are willing to pay full price for the right product. 
“Our consumer … this is a category that is very important to them. So when people have discretionary income, it may be limited, but you’re gonna prioritize where you spend it, right?” said Dillon. “So they’re prioritizing, but I’d say spending with purpose.”
Dillon has also been working to revamp Foot Locker’s stores, where it still does about 80% of its annual sales. She’s built new, off-mall locations, closed underperforming stores and refreshed existing locations. With these changes, the plan was to entice brands to send their best products and consumers to choose Foot Locker instead of shopping with a brand directly or going to a competitor, such as Dick’s Sporting Goods. 
In April, the retailer unveiled its “store of the future,” completely revamping the old-school Foot Locker format and serving as a model for its store refreshes. 
“Instead of a wall of shoes, it’s really a house of brands,” said Dillon. “And I think it’s coming to life in a way that our brand partners are thrilled with. We’ve heard that from everybody.” More

Best Buy missed Wall Street’s quarterly sales expectations on Thursday as softer demand for consumer electronics persisted.
However, the retailer beat on earnings per share and stuck by its full-year forecast.
Best Buy has noticed a pullback in purchases of discretionary items as consumers manage higher costs because of inflation.

A Best Buy store stands outside of a Brooklyn mall on August 29, 2023 in New York City.
Spencer Platt | Getty Images

Best Buy on Thursday missed Wall Street’s quarterly sales expectations but stressed higher profits and lower costs as softer demand for consumer electronics continues. Shares of the retailer jumped almost 10% in premarket trading.
The retailer beat on earnings per share and stuck by its full-year forecast. It expects revenue to range from $41.3 billion to $42.6 billion for the full year, which would mark a drop from the most recently ended fiscal year when full-year revenue totaled $43.45 billion. The company said comparable sales will range from flat to a 3% decline.

On an earnings call, CEO Corie Barry said Best Buy expects 2024 “to be a year of increasing industry stabilization,” echoing remarks the company first made in February. She said the retailer expects sales trends to “sequentially improve” in the next three quarters.
But, she added, the retailer still faces many challenges, including persistent inflation, high mortgage rates and a hangover from outsized tech spending during the pandemic.
Here’s how Best Buy did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: $1.20 adjusted vs. $1.08 expected
Revenue: $8.85 billion vs. $8.96 billion expected

The company’s net income for the three-month period that ended May 4 rose slightly to $246 million, or $1.13 per share, from $244 million, or $1.11 per share, a year earlier. Adjusting for one-time items, including restructuring charges, Best Buy reported earnings of $1.20 per share.
Net sales dropped to $8.85 billion from $9.47 billion in the year-ago period.

Best Buy’s sales have been sluggish, as the company deals with the aftermath of roughly two years of unusually high sales during the Covid pandemic. The retailer has been in the middle of a waiting game for the replacement cycle of laptops, kitchen appliances and more to normalize and for the debut of new tech gadgets to push customers to its stores and website.
Barry said on the earnings call that new devices will help lift excitement and sales. For example, she pointed to new Apple iPads and Microsoft laptops with the company’s Copilot artificial intelligence tool built in. Plus, she said, the company plans to have a series of sales events from July through mid-September focused on students and parents who are shopping for laptops and other items for back-to-school.
Like other retailers, Best Buy has noticed a pullback in purchases of discretionary items as consumers manage higher costs because of inflation.
Barry said customers continue to seek value and hold back when it comes to pricier purchases. She said the quarter was more promotional than expected in both the number of deals and size of discounts, with especially high promotions in certain categories like major appliances.
The company said it saw growth in its services and laptop categories.
Comparable sales, a metric that includes sales online and at stores open at least 14 months, declined 6.1% compared with the year-ago period. CFO Matt Bilunas said on the company’s earnings call that comparable sales declined 4.5% in February and dropped by 7% in both March and April.
In the U.S., comparable sales dropped 6.3% and online sales tumbled 6.1% year over year. Even so, online sales accounted for nearly one-third of total U.S. revenue in the quarter.
The company has looked to newer businesses, including its subscription-based membership program. It relaunched My Best Buy as a three-tier program in late June. The lowest tier of the program is free, but the top tier costs $179.99 per year for perks like round-the-clock tech support, up to two years of product protection and 20% off repairs, among other benefits.
The Minneapolis-based retailer has also slashed spending. Earlier this year, Barry said the company would lay off workers and cut costs across the business. She did not specify the number of layoffs, but said Best Buy would invest in areas that could drive growth, like artificial intelligence.
Best Buy said it spent $15 million on restructuring costs during the quarter, primarily related to severance or similar pay for employees who lost their jobs. It said it does not expect to have any other significant charges related to those layoffs, which began in the company’s fiscal fourth quarter.
As of early February, Best Buy had more than 85,000 employees. That’s down from the nearly 125,000 workers that it had in early 2020 and the more than 90,000 employees it had in early 2023, according to company financial filings.
The company also said in late February that it would close 10 to 15 stores in the fiscal year, after shutting 24 stores in the previous one.
Meanwhile Barry said the company is updating the look of stores across the chain. She said the “refreshes” aren’t as costly as full store remodels, which allows the company to improve all locations rather than a limited number.
It is also leaning on vendors as it trims back its workforce. For example, she said, Samsung is providing more experts in appliance departments across hundreds of Best Buy stores.
Best Buy on Thursday adjusted its full-year capital expenditures forecast to an estimate of $750 million, down from as much as $800 million.
Shares of Best Buy closed on Wednesday at $71.90, bringing the company’s market value to about $15 billion. As of Wednesday’s close, the company’s stock is down about 8% year-to-date, trailing behind the S&P 500’s gains of about 10%. More

Boeing’s departing CEO Dave Calhoun and other top leaders are scheduled to meet with the Federal Aviation Administration to present its safety plan.
The FAA in February gave Boeing 90 days to come up with a quality improvement plan in the wake of a near-catastrophic door plug blowout in January.
Boeing plans to spell out improvements in employee training, platforms for workers’ concerns and the reduction of out-of-sequence work.

Boeing 737 Max 8 fuselages manufactured by Spirit Aerosystems in Wichita, Kansas are transported on a BSNF train heading west over the Bozeman Pass March 12, 2019 in Bozeman, Montana. 
William Campbell | Corbis News | Getty Images

Boeing CEO Dave Calhoun and other top company leaders are scheduled to meet with the Federal Aviation Administration on Thursday to present a quality improvement plan showing better staff training and production practices at its factories.
The FAA ordered the report following a near-catastrophic blowout of an airplane door panel on a new 737 Max 9 earlier this year.

At the end of February, FAA Administrator Mike Whitaker, who is scheduled to join the meeting with Boeing’s leadership on Thursday, gave the company 90 days to come up with a quality improvement plan after the incident on an Alaska Airlines flight in early January.
Federal safety investigators found that bolts appeared to not have been installed to hold the panel in place before the plane was delivered to Alaska Airlines.
The FAA also barred Boeing from increasing 737 Max production until the agency was satisfied with Boeing’s quality control improvements. That limitation isn’t likely to be reversed on Thursday.
The crisis has again tarnished Boeing’s reputation, opened it to more federal scrutiny and forced it to slow 737 Max output. The aircraft delays have meant airline customers like United and Southwest have had to change their growth plans.
Boeing Chief Financial Officer Brian West on May 23 said that the company expects to burn cash this year instead of generating it. For the current quarter alone, Boeing expects to use about $4 billion.

Boeing executives have acknowledged that the 90-day plan won’t turn things around immediately.
“The 90-day plan … is not a finish line,” West said at an investor conference last week. “We look forward to the feedback that we’ll get after next week.” 
Boeing’s update Thursday is expected to detail its improvements to staff training, such as simplified instructions for mechanics and tool availability, as well as the reduction of so-called traveled work, where required tasks on the planes are done out of sequence.
The manufacturer is also set to explain more about its factory “stand-downs,” in which it paused work to have conversations about potential improvements on production lines with employees. The manufacturer implemented those brief work pauses in the months after the Alaska Airlines door plug blowout.
Calhoun, who said he would step down by the end of the year, told staff in April that the company has received more than 30,000 “ideas on how we can improve” and that “speak up submissions” — concerns raised by staff — and comments were up 500% over 2023.

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