Best Buy (BBY.N), stuck to its annual sales and profit forecasts on Thursday despite posting quarterly results that topped estimates, because it expects tariff-induced uncertainty within the second half of the 12 months.
Shares of the highest U.S. electronics retailer fell 5.7% in morning trading, as investors focused on a probable hit to the corporate’s margins as a result of higher tariffs on U.S. imports.
Several retailers, including Best Buy, have had to boost prices on some goods to soak up the hit from these steep levies.
Company executives said the worth hikes were lower than the general rate of tariffs, owing to its mitigation strategies.
Best Buy, which sources most of its goods from China, has also made efforts to diversify its supply chain and buy more products from fewer partners to barter higher terms in a bid to counter higher costs.
Meanwhile, the corporate’s sales have struggled over the past three years as price-sensitive shoppers postpone big-ticket purchases.
CEO Corie Barry said customers had grow to be more deal-focused and waited for shopping events similar to Black Friday and back-to-school promotions, though spending remained resilient.
“Big-ticket purchases are approached more rigorously, though consumers proceed to spend on expensive technology when there’s a transparent need or innovation,” Barry said on a post-earnings call.
On a media call with journalists, Barry said that the White House had been open to feedback from Corporate America on the impact of tariffs.
Strong sales of Nintendo Switch 2 gaming consoles, which were launched in June, and a surge in demand for artificial intelligence-powered laptops and mobile phones helped reverse a sales decline throughout the quarter.
“Tariffs and a pullback in discretionary big-ticket categories remain a drag, and in contrast to general merchandise (retailers), Best Buy has limited fallback categories to soak up that pressure,” Emarketer analyst Suzy Davidkhanian said.
Comparable sales for the quarter ended August 2 rose 1.6%, the largest increase in three years. Analysts on average had expected a 0.52% drop, in response to data compiled by LSEG.
On an adjusted basis, it earned $1.28 per share, compared with the estimates of $1.21 per share.
The corporate expects comparable sales for fiscal 12 months 2026 to range between a 1% drop and a 1% rise and an adjusted profit of between $6.15 and $6.30 per share.
Best Buy (BBY.N), stuck to its annual sales and profit forecasts on Thursday despite posting quarterly results that topped estimates, because it expects tariff-induced uncertainty within the second half of the 12 months.
Shares of the highest U.S. electronics retailer fell 5.7% in morning trading, as investors focused on a probable hit to the corporate’s margins as a result of higher tariffs on U.S. imports.
Several retailers, including Best Buy, have had to boost prices on some goods to soak up the hit from these steep levies.
Company executives said the worth hikes were lower than the general rate of tariffs, owing to its mitigation strategies.
Best Buy, which sources most of its goods from China, has also made efforts to diversify its supply chain and buy more products from fewer partners to barter higher terms in a bid to counter higher costs.
Meanwhile, the corporate’s sales have struggled over the past three years as price-sensitive shoppers postpone big-ticket purchases.
CEO Corie Barry said customers had grow to be more deal-focused and waited for shopping events similar to Black Friday and back-to-school promotions, though spending remained resilient.
“Big-ticket purchases are approached more rigorously, though consumers proceed to spend on expensive technology when there’s a transparent need or innovation,” Barry said on a post-earnings call.
On a media call with journalists, Barry said that the White House had been open to feedback from Corporate America on the impact of tariffs.
Strong sales of Nintendo Switch 2 gaming consoles, which were launched in June, and a surge in demand for artificial intelligence-powered laptops and mobile phones helped reverse a sales decline throughout the quarter.
“Tariffs and a pullback in discretionary big-ticket categories remain a drag, and in contrast to general merchandise (retailers), Best Buy has limited fallback categories to soak up that pressure,” Emarketer analyst Suzy Davidkhanian said.
Comparable sales for the quarter ended August 2 rose 1.6%, the largest increase in three years. Analysts on average had expected a 0.52% drop, in response to data compiled by LSEG.
On an adjusted basis, it earned $1.28 per share, compared with the estimates of $1.21 per share.
The corporate expects comparable sales for fiscal 12 months 2026 to range between a 1% drop and a 1% rise and an adjusted profit of between $6.15 and $6.30 per share.
