(AP Photo/Elise Amendola, File)
The results, however, beat Wall Street expectations, and the nation's largest consumer electronics seller maintained its annual profit outlook.
Even so, shares fell $1.23, or 3.2 percent, to 37.43 in premarket trading.
Profit was $153 million, or 36 cents per share, in the quarter ended May 30. That compares with $179 million, or 43 cents per share, a year earlier as stimulus checks spurred spending.
Adjusted profit was 42 cents per share. Analysts surveyed by Thomson Reuters expected 34 cents per share.
Revenue rose 12 percent to $10.1 billion as it opened 185 new stores and gained some market share from the shuttered Circuit City Stores. The company said it had gained 2 percentage points of market share in the quarter and that its gains accelerated after the March 8 closing of Circuit City outlets across the U.S.
But clearly Best Buy is facing increasing pressure from Wal-Mart Stores Inc., the world's largest retailer. Wal-Mart is aggressively expanding into higher-end TV and electronics with names like Sony and Dell to woo those orphan customers.
In fact, Best Buy's same-store sales fell 6 percent and the stronger dollar hurt overseas results. Same-store sales, or sales at stores open at least a year, are a key measure of a retailer's health because they measure sales at existing stores rather than newly opened ones.
Best Buy, however, is hoping that its service will help differentiate itself from discounters like Wal-Mart hoping to grab share left by Circuit City.
"Regardless of the environment, we find ourselves in, we know that our people will continue to be our key point of differentiation in helping Best Buy grow," said Brian Dunn, president and chief operating officer in a statement. Dunn will become CEO on June 24.
Best Buy said it continues to project annual earnings between $2.50 and $2.90 per share. Those estimates include restructuring charges. Analysts project $2.79 per share.