Best Buy's online sales growth slows, overshadowing strong quarterly results.

(Reuters)- Best Buy, the largest consumer electronics retailer in the United States, reported a slowdown in online sales during its first fiscal quarter, leading to a sharp drop in its stock price, with investors oblivious to strong profits and sales during the period.

Growth in comparable domestic online sales slowed to 12 percent, compared to 22,5 percent growth in the first quarter of last year.

Best Buy's Chief Financial Officer, Corie Barry, said in a conference call with investors that online sales in the first quarter of last year benefited from product launches such as the Nintendo Switch and the Samsung S8, and that the company gained market share online this quarter.

Best Buy shares fell about 8 percent this afternoon, to $69,87, after rising nearly 11 percent since the beginning of the year.

“Online sales growth has slowed significantly… and the company should invest to support its growth by improving the online experience,” said Jason Benowitz, analyst and senior portfolio manager at The Roosevelt Investment Group.

Best Buy also did not revise its financial outlook for the full year, which may also have led the stock market to assume a rather sharp slowdown in growth, Benowitz said.

The company reiterated its fiscal outlook made in March.

Best Buy CEO Hubert Joly said there is nothing to be taken from the fact that the company has not updated its financial outlook for the entire year, as the range of forecasts for this year is quite broad.

“We feel there’s still a lot of the year ahead of us,” he said. “We’re trending toward the top of our revenue range.”

Overall sales growth was driven by strong consumer demand and increased product innovation. Demand for cell phones, computers, tablets, and smart home products generated comparable sales growth for the retailer.

Same-store sales rose 7,1 percent in the first quarter ended May 5, easily exceeding analysts' average expectation of a 2,9 percent increase, according to Consensus Metrix. The growth, the retailer's largest since fiscal year 2005, benefited from a weaker comparison base last year.

Despite a slowdown in online sales this quarter, the company's recovery has been strong. Best Buy has weathered the onslaught of Amazon.com better than most retailers.

Best Buy has about 15 percent of the U.S. consumer electronics market.

Net income rose to $208 million, or $0,72 per share, in the quarter, compared with $188 million, or $0,60 per share, a year earlier. The company's revenue rose to $9,10 billion, exceeding estimates of $8,74 billion.

By Nandita Bose