Best Buy Co., Inc. (NYSE: BBY) reported Q1 EPS of $0.33, $0.13 better than the analyst estimate of $0.20. Revenue for the quarter came in at $9.04 billion versus the consensus estimate of $9.2 billion.

Comps fell 5.8 percent.

Domestic Segment First Quarter Results

Domestic Revenue

Domestic revenue of $7.78 billion declined 2.1% versus last year. This decline was primarily driven by (1) a comparable sales decline of 1.3%; and (2) a revenue decline of $63 million, or 80 basis points, due to the less favorable ongoing economics of the new credit card agreement. These declines were partially offset by $16 million, or 20 basis points, of non-recurring financial benefits associated with the transitional economics of the new credit card agreement.

Domestic online revenue was $639 million and comparable online sales increased 29.2% due to (1) substantially improved inventory availability made possible by the chain-wide rollout of our ship-from-store capability that was completed in January 2014; (2) a higher average order value; (3) increased traffic driven by greater investment in online digital marketing; and (4) a higher number of online orders being placed in our retail stores.

From a merchandising perspective, growth in computing, gaming and appliances was more than offset by declines in other categories, including tablets, services and home theater.

Domestic Gross Profit Rate

Domestic gross profit rate was 22.7% versus 23.4% last year. This 70-basis point decline was primarily due to (1) a 60-basis point negative impact related to the less favorable ongoing economics of the new credit card agreement; (2) proceeds from legal settlements that occurred in Q1 FY14 that did not recur in Q1 FY15; (3) increased product warranty costs primarily relating to the mobile category; and (4) structural investments in price competitiveness, particularly in accessories. These declines were partially offset by (1) the realization of our Renew Blue cost reductions and other supply chain cost containment initiatives; (2) more effective management of our promotional initiatives; and (3) higher inventory shrinkage in Q1 FY14 that did not recur in Q1 FY15. In addition, the gross profit rate benefited from a 15-basis point impact from the non-recurring financial benefits associated with the transitional economics of the new credit card agreement.

Domestic Selling, General and Administrative Expenses (“SG&A”)

Domestic SG&A expenses were $1.54 billion or 19.7% of revenue versus $1.64 billion or 20.6% of revenue last year. On a non-GAAP basis, Domestic SG&A expenses were $1.53 billion or 19.6% of revenue versus $1.63 billion or 20.5% of revenue last year. This 90-basis point rate decline was primarily driven by (1) the realization of Renew Blue cost reduction initiatives; and (2) tighter expense management throughout the company. These impacts were partially offset by our Renew Blue investments in online growth.

International Segment First Quarter Results

International Revenue

International revenue of $1.25 billion declined 10.5% versus last year. This decline was primarily driven by (1) a comparable sales decline of 5.8% driven by Canada, China and Mexico; (2) the negative impact of foreign currency exchange rate fluctuations; and (3) the loss of revenue from large-format store closures in China, partially offset by revenue from new store openings in Mexico.

International Gross Profit Rate

International gross profit rate was 20.5% versus 21.3% last year. This 80-basis point rate decline was primarily driven by an increased mix of lower-margin gaming and computing products and increased promotional activity in Canada.

International SG&A

International SG&A expenses were $285 million or 22.7% of revenue versus $348 million or 24.8% of revenue last year. On a non-GAAP basis, International SG&A expenses were $284 million or 22.6% of revenue versus $340 million or 24.3% of revenue last year. This 170-basis point rate decline was primarily driven by Renew Blue cost reductions and tighter expense management in Canada and China.

Renew Blue Cost Reduction Initiatives Update

Since our Q4 FY14 earnings release, Renew Blue annualized cost reductions have increased an additional $95 million, bringing the total Renew Blue annualized cost reductions to $860 million ($645 million in SG&A expenses and $215 million in cost of goods sold). This $95 million in cost reductions ($75 million in SG&A and $20 million in cost of goods sold) is primarily driven by the continued optimization of (1) the corporate organizational structure; (2) the field and store operating models in the U.S. and Canada; and (3) returns, replacements and damages.

For earnings history and earnings-related data on Best Buy Co., Inc. (BBY) click here.