Best Buy Co. shares soared Thursday after the Richfield-based electronics retailer reported sales that topped estimates as demand for consumer electronics held up in the face of inflation and soaring gas prices.

Revenue for the first quarter was $8.9 billion, beating the average analyst estimate compiled by Bloomberg. Comparable sales also exceeded Wall Street projections, rising 2% for the quarter.

Domestic revenue was driven by 1.8% comparable sales growth, with gaming, computing, mobile phones and services popular categories.

“While customers continue to be thoughtful about big-ticket purchases, they are willing to spend on high-price-point products when they need to or when there is technology innovation,” Chief Executive Officer Corie Barry said on the earnings call.

The shares rose 16% on Thursday. The stock had dropped 3.6% this year through Wednesday’s close, while the S&&P 500 Index gained 9.9% in that time.

Sales of new products, such as the Nintendo Switch 2, have buoyed the chain in recent quarters. Demand continues to drive momentum even as consumers grow more budget-conscious due to the war in Iran, high gas prices and inflation.

The results come as the company prepares for a leadership transition. Last month, the retailer named Chief Customer, Product and Fulfillment Officer Jason Bonfig as CEO, succeeding Barry, starting Nov. 1. Executives used the earnings call to outline the company’s objectives going forward.

Best Buy will expand its footprint with small- and medium-format stores starting this summer in order to reach customers in growing markets, urban neighborhoods and suburbs. And it will add a greater assortment of the latest RGB televisions, which uses new LED technology.

The retailer will launch Meta Labs at Best Buy, specialized areas in some stores that will focus on Meta Platforms Inc.’s eyeglasses and VR categories. Others stores will feature furniture shops or an outlet assortment.

“We’re not just a retailer anymore. We’re becoming a retailer, media, advertising and technology company,” Bonfig said.

Economy

Inflation measure climbs 3.8% annually

A measure of inflation closely watched by the Federal Reserve accelerated in April to a three-year high, reinforcing the central bank’s budding support to consider raising interest rates if price pressures do not ease.

The personal consumption expenditures index rose 3.8% from the same time last year. It was the fastest annual pace since May 2023, when the Fed was in the midst of rais

ing rates to tame a burst of inflation that had emerged in the wake of the pandemic.

A measure of underlying inflation that strips out volatile food and energy prices also notched a multiyear high.

That measure, “core” inflation, increased at an annual pace of 3.3%, the fastest since November 2023.

On a monthly basis, inflation rose slightly less than expected. Overall prices jumped 0.4% and those excluding food and energy prices ticked up 0.2%.

Australia

3M sued over PFAS ‘forever chemicals’

Australia is suing U.S. conglomerate 3M for more than 2 billion Australian dollars ($1.4 billion) over so-called “forever chemical” contamination from firefighting foam at defense bases, the government said on Thursday.

The government’s largest-ever claim for compensation relates to contamination with per- and polyfluoroaklyl substances, known as PFAS, at 28 bases. Human-made PFAS are commonly referred to as “forever chemicals” because they don’t break down naturally.

Australia filed the suit in the Federal Court of Australia against Maplewood-based 3M Co. and its subsidiary 3M Australia.

3M said it would fight Australia’s claim.

“3M has never manufactured PFAS in Australia and ceased sales of the products at issue in Australia around two decades ago,” 3M said in a statement. “Despite this, the (Australian) Department of Defense continued to use PFAS-containing firefighting foams for nearly two decades longer.”

— From news services