Sales of products such as basic dishwashers, refrigerators and new smart appliances that help conserve energy suggest the U.S. housing recovery remains firmly on track. On Thursday, electronics retailer Best Buy (BBY) reported that same-store sales of appliances, which represented about 8% of its first-quarter business, increased a robust 12.3%. That's compared to 9.1% growth in the category a year ago.
That performance stood in contrast to other, more mixed areas of Best Buy's business.
Overall domestic same-store sales increased 0.6% for the quarter, but fell 0.7% when excluding the impact of the company's new installment billing plans for mobile.
The quarter's results were weighed down by declines in every business for the company except appliances and consumer electronics. Same-store sales in electronics increased 7.6% in the quarter, owing to demand for expensive 4K high-definition TVs.
Best Buy's adjusted earnings per share came in at 37 cents, vs. the 29 cents a share consensus estimate. The company also expressed optimism about the rest of the year's results. Shares surged more than 5% in early morning trading.
Best Buy wasn't the only big-box retailer to succeed in selling appliances in the cold, snowy start to 2015. Home improvement retailer Lowe's (LOW), which notched an earnings miss of 4 cents a share for the quarter, still delivered a strong showing in appliance sales. It was the second quarter in a row of double-digit percentage same-store sales growth in appliances.
In the first quarter, Lowe's launched a home improvement center exclusive in the Frigidaire Pro appliance series. Frigidaire Pro refrigerators can cost as much as $2,000. Lowe's also added 17 "kitchen suites," or tiny shops, to each store late last year, bolstering the in-store presentation of appliances.
Same-store sales for Lowe's increased 5.3% in the quarter, but the company missed earnings and revenue estimates and the stock fell 4.6% on Wednesday. It was rising by 0.5% in early Thursday trading, though.
"I would say that we're seeing strength across many departments: water heaters, appliances, our tools, riding mowers, all of our outdoor garden categories and grills," said Home Depot's Executive Vice President of Merchandising Edward P. Decker on the May 19 earnings call.