Updated from 9:20 a.m. EDT

Best Buy's

(BBY) - Get Report

keen focus on customers could help it maintain robust same-store sales for the rest of the year, even as comparisons get increasingly difficult.

On Wednesday, the electronics retailer said it swung to a first-quarter profit from a loss a year ago, helped by expense management and strong sales. The company also forecast second-quarter earnings within the range of analysts' projections.

Nevertheless, shares of Best Buy were lately down $1.43, or 2.7%, at $51.65 in Wednesday trading.

Net earnings for the three months ended May 29 were $114 million, or 34 cents a share, compared with a loss of $25 million, or 8 cents a share, in the year-ago quarter.

Earnings from continuing operations were $114 million, or 34 cents a share, compared with $69 million, or 21 cents a share, in the year-earlier period. On that basis, analysts were calling for 33 cents a share.

As the company reported on June 3, first-quarter sales increased 17% to $5.47 billion with same-store sales up 8.3%, helped by an increase in customer traffic.

Selling as well as general and administrative expenses improved to 22% of total sales in the latest quarter from 22.9% last year.

Gross profit as a percentage of sales was 25.4%, flat with the prior-year quarter. An improved product assortment and more effective promotions helped gross profit, Best Buy said, while its customer loyalty program, called Reward Zone, hurt gross profit by 0.8%. The amount of loyalty program members increased, which in turn increased the rate points earned that were redeemed. Reward Zone purchases make up about 25% of total purchases, the company said.

"Reward Zone members are shopping nearly twice as often as nonmembers," Best Buy said. "When they come in, they're spending more than two times as much as non-members."

During its post-earnings conference call, Best Buy updated analysts on several new and current initiatives, including the rollout of 70 to 74 pilot stores under its "customer centricity" program, which is designed to better meet the needs of customers.

In fact, the program should help the company achieve several more years of double-digit topline growth, Best Buy predicted. "The days are numbered for retailers to remain product centered," the company noted on the call.

The company hopes the positive impact of the customer centricity program will help it achieve positive same-store sales in the last three quarters of the year. It faces same-store sales growth comparisons in the second, third and fourth quarters of 6.7%, 8.6% and 9.7%, respectively.

Best Buy expects the pilot stores to boost the bottom line, as the 33 lab stores operating in the latest quarter contributed 20 basis points to gross profit margin. "The pilot stores will meet our expectations more quickly as they will have the benefit of lessons learned from the lab stores that preceded them," Best Buy said.

The pilot stores will serve what Best Buy sees as its four key customer types: "the family man looking for technology with value," high-end customers, suburban mothers, and young, active early technology adopters.

Another initiative is more customer-friendly displays. For example, Best Buy said it can now present twice as many notebook computers, or about 25 different types.

The company also expects to increase its assortment of flat-panel LCD and plasma TVs by about 50% in the next six months, from about 40 current offerings to 60. While that means fewer analog choices, the company said "we're going to market the investment in those parts of the business where the consumer is voting with their dollars."

Best Buy also is testing a store-in-store concept called Magnolia Audio Video at two locations in California, which are geared toward more affluent customers. Magnolia offers high-end home theatre electronics, and the company sees expansion opportunity within the concept.

Another concept in testing is a prototype store in a West Hollywood, Calif. that features home theatre electronics, computers and home and personal networking devices. Best Buy calls it a "solution-based retail environment" designed as a "holistic customer experience." Essentially, the concept has everything a customer would need to make a home digitally equipped.

For the second quarter, Best Buy expects to earn 47 cents to 52 cents from continuing operations, which would compare with 42 cents a share in the year-earlier period. Analysts are calling for 50 cents a share.

Same-store sales in the second quarter are seen rising 5% to 7%.

In fiscal 2005, Best Buy maintained its earnings from continuing operations expectation of $2.80 to $2.93 a share with same-store sales up 4% to 6%. Analysts' consensus is $2.88 a share.

The Minneapolis-based company opened 84 new stores in the last year.