Best Buy cuts sales and profit outlook on tariff uncertainty
Best Buy lowered its full-year comparable sales and profit forecasts on Thursday, citing growing concerns that U.S. tariffs could dampen consumer demand for high-cost items like appliances, home theater systems, and gaming consoles.
Shares of the company were down 2% in premarket trading after it also posted a bigger drop in first-quarter sales than analysts had expected, News.Az reports, citing Reuters.
American households are in limbo as they battle higher borrowing costs, with tariffs now fueling concerns of price surges on everything from toys to groceries and sneakers.
Best Buy CFO Matt Bilunas said the forecast accounted for the impact from levies, assuming they stay at the current levels for the rest of the year, and "no material change in consumer behavior from the trends we have seen in recent quarters".
The company is heavily reliant on imports from China, its biggest manufacturing hub, for products such as gaming consoles, audio equipment, cameras and drones, according to Telsey Advisory Group analyst Joe Feldman.
Its executives have said earlier that about 60% of the company's overall cost of goods sold came from China, with the next largest country being Mexico at about 20% and almost no domestic sourcing.
Retail giant Walmart signaled soft demand in big-ticket discretionary merchandise in its most recent quarterly earnings, while the economic uncertainty has forced several other retailers to shelve their annual targets altogether.
The top U.S. electronics retailer expects fiscal 2026 comparable sales in the down 1%-to-up 1% range, compared to its prior expectation of flat to up 2%.
It now forecasts adjusted earnings per share between $6.15 and $6.30, below its prior guidance of $6.20 to $6.60 per share.
Same-store sales declined 0.7% for the quarter ended May 3, compared to an expectation of a 0.6% drop, according to data compiled by LSEG.
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