Best Buy's First-Quarter Profit Income Falls - Best Buy Co.'s (BBY) fiscal first-quarter profit rose a disappointing 1.3% as sales rebounded slightly from last year's weak levels but spending tied to new stores and other growth initiatives was higher than expected.

The biggest U.S. consumer-electronics retailer by sales reiterated its financial view for the year and estimated it gained one percentage point of market share from a year earlier in what's typically Best Buy's smallest quarter of the year.

Sales during the company's fiscal 2011 first quarter rose 6.9% to $10.8 billion, from $10.1 billion a year earlier, falling short of Wall Street's forecast of $10.9 billion. In last year's previous quarter, the company's profits reached $153 million, or 36 cents per share, and 42 cents per share on an adjusted basis.

Revenue climbed 6.9% to $10.79 billion, while same-store sales--or revenue at stores, call centers, and websites operating for at least 14 full months--climbed 2.8% after a 6.2% drop a year ago.

The first quarter is seasonally Best Buy's weakest for sales and was expected to represent only about a fifth of sales and less than 15% of net income for the year.

Gross margin rose to 25.9% from 25.3%--slightly better than analysts expected--on what Best Buy called increased promotion effectiveness and strength at Best Buy Mobile.

Best Buy reported earnings of only $155 million, or 36 cents per share, well below the 50 cents per share the Street expected.