Best Buy cuts annual profit forecasts on U.S. tariff uncertainty
Best Buy Co. Inc. BBY-N slashed its full-year comparable sales and profit forecasts on Thursday amid concerns that U.S. tariffs would weigh on consumer demand for big-ticket items such as appliances, home theatres and gaming consoles.
Shares of the company were down 2 per cent in premarket trading after it also posted a bigger drop in first-quarter sales than analysts had expected.
American households are in limbo as they battle higher borrowing costs, with tariffs now fuelling concerns of price surges on everything from toys to groceries and sneakers.
Best Buy chief financial officer 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 behaviour 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 per cent of the company's overall cost of goods sold came from China, with the next largest country being Mexico at about 20 per cent and almost no domestic sourcing.
Retail giant Walmart Inc. WMT-N signalled 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 per cent-to-up 1-per-cent range, compared with its prior expectation of flat to up 2 per cent.
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 per cent for the quarter ended May 3, compared with an expectation of a 0.6-per-cent drop, according to data compiled by LSEG.
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