Latest news with #MattBilunas
Yahoo
3 days ago
- Business
- Yahoo
Best Buy Stock Tumbles as Retailer Lowers Outlook on Tariffs Hit
Best Buy shares tumbled more than 8% to lead S&P 500 decliners Thursday after the electronics retailer lowered its full-year outlook because of tariffs. Best Buy gets a large portion of its products from China and Mexico, both of which have been hit by tariffs imposed by President Donald Trump. Best Buy shares are down by more than a fifth so far this Buy (BBY) shares tumbled more than 8% to lead S&P 500 decliners Thursday after the electronics retailer lowered its full-year outlook because of tariffs. The retailer now sees fiscal 2026 revenue between $41.1 billion and $41.9 billion, below its prior guidance of $41.4 billion to $42.2 billion; comparable sales ranging from down 1% to up 1%, versus flat to up 2.0%; and adjusted earnings per share (EPS) of $6.15 to $6.30, down from $6.20 to $6.60. Despite the cuts, the midpoints of Best Buy's new projections all were in line with or above Visible Alpha consensus estimates. "Today we are updating our full-year guidance to incorporate the impact of tariffs," Best Buy CFO Matt Bilunas said. "Our underlying working assumptions are that tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behavior from the trends we have seen in recent quarters." Best Buy gets a large portion of its products from China and Mexico, both of which have been hit by the tariffs imposed by President Donald Trump. China accounted for 55% and Mexico 20% of the company's sourcing in its fiscal 2025, according to its annual report. The lowered full-year projections came as the retailer reported mixed first-quarter results, with adjusted EPS of $1.15 topping Visible Alpha estimates but revenue of $8.77 billion falling short. Comparable store sales fell 0.7% year-over year, far greater than the projected 0.2% decline. Best Buy shares are down nearly 25% this year. Read the original article on Investopedia
Yahoo
3 days ago
- Business
- Yahoo
Best Buy forecast stable tariffs — but a court had already ruled them illegal
It's been a tough spring for many retailers as consumers have worried about a possible recession and grown wary of constantly shifting trade policy. Now add Best Buy to that list. On Thursday, the electronics and appliances giant reported declining sales. There were bright points, however. Best Buy still managed to beat Wall Street's earnings expectations, posting adjusted EPS of $1.15 on $8.77 billion in revenue. Even the sales decline portrayed an upbeat picture in some ways. Comparable sales fell only 0.7%, a far smaller drop than last year's 6.1%. Online sales rose 2.1% and now make up nearly a third of U.S. revenue. Margins held steady, while services and memberships helped lift gross profits. Despite these wins, Best Buy may be finding it impossible to plan in the most literal sense, with its tariff-related forecast arguably out of date within just hours. The company understandably flagged tariffs as a key risk in its updated FY26 outlook, saying it expects tariffs to stay at current levels — just hours after a federal court struck down much of Trump's 'Liberation Day' tariffs, demonstrating the constant whiplash that's coming to define the business environment in 2025. 'We expect annual comparable sales growth to be in the range of down 1% to up 1%, and our adjusted operating income rate to be similar to last year at approximately 4.2%,' CFO Matt Bilunas said in the release. 'Our underlying working assumptions are that tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behavior from the trends we have seen in recent quarters. As you can imagine, and based on our history, we will continue to scenario-plan and adjust with agility as the situation evolves.' And certainly, the situation is certainly evolving, one way or another. Smooth projections aside, Best Buy may be especially vulnerable to tariffs because it sells big-ticket, delay-able items like TVs, laptops, and appliances, precisely the kinds of purchases consumers postpone when confidence dips or prices rise. Most of its inventory is imported from Asia, too, meaning suppliers may pass tariff-related costs down the chain. That scenario can put pressure on both margins and demand. Upside is possible, too. A short-term sales bump can occur if shoppers try to buy before tariffs hit, though it could also be followed by a sharp post-tariff slowdown. Such a dynamic could account for Best Buy's relatively strong quarter and suggest rougher waters ahead, depending on how the White House reacts to the court ruling and whether it attempts to impose tariffs through other means. Shares of Best Buy are down 3% before Thursday's bell. For the latest news, Facebook, Twitter and Instagram. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
3 days ago
- Business
- Globe and Mail
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.
Yahoo
3 days ago
- Business
- Yahoo
Best Buy stock sinks after it cuts guidance due to Trump's tariffs
Best Buy (BBY) investors are disappointed on Thursday morning as the retailer reports mixed earnings and cuts guidance over Trump administration's tariffs. Same-store sales fell 0.7% year over year, more than the 0.57% Wall Street expected. Revenue fell 0.9% to $8.77 billion, missing estimates of $8.80 billion. Adjusted earnings per share slid 4% to $1.15, beating estimates of $1.09. In the release, Best Buy CEO Corie Barry said the team had to navigate and plan "within dynamic macroeconomic conditions.' The company cut its 2025 sales and earnings guidance. It now expects revenue of $41.1 billion to $41.9 billion, down from previous projection of $41.4 billion to $42.2 billion. Adjusted EPS is expected to be $6.15 to $6.30, lower than the prior forecast of $6.20 to $6.60. The update to the guidance now incorporates the "impact of tariffs," CFO Matt Bilunas said in the release. Same-store sales are expected to be down 1% to up 1% for the year, versus the previous range of flat to up 2%. The guidance assumes "tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behavior from the trends we have seen in recent quarters," per Bilunas. Ahead of the report, Telsey Advisory Group's Joe Feldman said in a note he anticipates a return to slight same-store sales growth in 2025, "followed by accelerated growth and a return to higher earnings in 2026." Shares were down 3% in pre-market trading and down more than 16% year to date, compared to the S&P 500 (^GSPC) remaining flat. Here's what Best Buy posted in the first quarter, compared to Bloomberg estimates: Adjusted earnings per share: $1.15 versus $1.09 Net sales: $8.77 versus $8.80 billion Same-store sales growth overall: -0.70% versus -0.57% Total US same-store sales growth: -0.70% versus -0.62% Sales growth for: Appliances: -8.10% versus -7.07% Entertainment: -13.30% versus -5.64% Consumer electronics: -5.20% versus -2.20% Computing and mobile phones: +5.80% versus +3.17% Services: 0.9% versus +4.00% International: -0.70% versus -0.09% Trump administration's tariffs and falling consumer sentiments remain its top headwinds. In a previous earnings call, Barry said China and Mexico are Best Buy's top two sources for products. "Let's call it about 55% of what we sell is sourced through China in some way, shape, or form, and another approximately 20% comes through Mexico," she said. "Which means the vast majority of the product assortment that we have in some way, shape, or form right now is subject to some level of tariffs." Most recently, the US temporarily dropped tariffs on Chinese imports from 145% to 30% for 90 days, while so-called reciprocal tariffs were suspended for a 10% universal duty. Then on Wednesday night, a US trade court blocked President Trump's tariffs. Barry had said second quarter to fourth quarter results would feel the brunt of the tariff impact. "It should be able to manage costs relatively well and leverage its leadership within consumer electronics to come out of the current environment on top," Feldman wrote. However, Wedbush analyst Matthew McCartney said in terms of mitigation tactics, "the complexity of the electronics supply chain and its deep ties to China make this difficult to do quickly." The "largest risk" to Best Buy's top line would be that electronic costs "increase materially," he said. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
3 days ago
- Business
- CNBC
Best Buy cuts full-year sales and profit guidance as tariffs raise cost of electronics
Best Buy on Thursday missed quarterly revenue expectations and cut its full-year sales and profit guidance as higher tariffs increase the costs of many consumer electronics that it sells. For its fiscal 2026, the retailer said it now expects $41.1 billion to $41.9 billion of revenue, down from its previous range of $41.4 billion to $42.2 billion. It said it expects adjusted earnings per share to range from $6.15 to $6.30, which compares to prior guidance of $6.20 to $6.60. In a news release, CFO Matt Bilunas said the company's outlook anticipates that tariffs will stay at the current levels and there will be "no material change in consumer behavior from the trends we have seen in recent quarters." "As you can imagine, and based on our history, we will continue to scenario-plan and adjust with agility as the situation evolves," he said. Here's how the consumer electronics company did compared with what Wall Street was expecting for the company's fiscal first quarter, based on a survey of analysts by LSEG: Best Buy's net income in the three-month period that ended May 3 declined about 18% to $202 million, or 95 cents per share, from $246 million, or $1.13 per share, in the year-ago period. First-quarter revenue dropped from $8.85 billion in the year-ago period. Best Buy is a closely watched name when it comes to the impact of tariffs since it sells iPhones, TVs, laptops, kitchen appliances and many other consumer electronics that tend to be made in China or other parts of Asia. CEO Corie Barry said in March that China and Mexico are the company's top two sources of merchandise, with about 55% and 20% of its products coming from those countries, respectively. The U.S. currently has a 30% tariff on imports from China, while goods compliant with the United States-Mexico-Canada Agreement are exempt from the Trump administration's 25% duty on Mexico. It is unclear now how those rates will change after a federal trade court struck down many of Trump's tariffs on Wednesday. As of Wednesday's close, shares of Best Buy are down nearly 17% so far this year. That trails behind the roughly flat performance of the S&P 500 year to date. Shares of Best Buy closed at $71.52 on Wednesday, bringing the company's market value to $15.14 billion.
