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.
Best Buy already increased prices on some items to blunt the costs from tariffs, with changes taking effect by mid-May, CEO Corie Barry said on a call with reporters.
Best Buy joins other companies like Abercrombie & Fitch and Macy’s in cutting its profit outlook this week due to tariffs.
Excluding one-time expenses, including restructuring charges for its Best Buy Health business, the company reported earnings of $1.15 per share.
Comparable sales, defined by Best Buy as revenue from online sales and stores open at least 14 months, dropped 0.7% year over year.
As higher tariffs raise the price of many of the consumer electronics it sells, Best Buy on Thursday missed quarterly revenue projections and reduced its full-year sales and profit guidance.
The retailer stated that it has lowered its revenue projections for fiscal 2026 from $41.4 billion to $42.2 billion to $41.1 billion to $41.9 billion. According to the statement, it anticipates adjusted earnings per share to fall between $615 and $630, compared to $620 to $660 in previous guidance.
In an interview with reporters, Best Buy CEO Corie Barry stated that the company has already raised prices on a few items to offset the costs of tariffs, and the changes will go into effect by mid-May. Price increases, according to her, are “the very last resort” after the business has taken other measures to offset increased costs. However, she refused to say which products are impacted, citing the need to remain competitive.
According to first-quarter earnings reports, many Americans have been greatly impacted by President Donald Trump’s constantly changing trade policy. S. . businesses that depend on an international supply chain. Due to tariffs, Best Buy has joined Abercrombie, Fitch, and Macy’s in reducing its profit outlook for this week. Other companies, like E. I. F. Because of the levies, Beauty has chosen not to offer full-year guidance.
During the press conference, Barry mentioned the most recent event that could alter the situation once more: a federal trade court invalidating a large number of Trump’s tariffs late Wednesday. She added that the decision serves as further evidence that the business must remain agile.
“If you look back over the last four months, there have been a lot of different points where the approach to global trade has changed,” she said. In order to avoid overreacting to any particular moment, I really tried to work with the team on staying insanely focused on our customers and making sure we are providing them with the appropriate assortment, price, and promotionality regardless of the situation. “.
Here is how the consumer electronics company performed in relation to Wall Street’s expectations for the first quarter of its fiscal year, as determined by an LSEG survey of analysts.
Earnings per share: $1.15 adjusted vs. $1 point 09 is anticipated.
$8.77 billion in revenue as opposed to… Expected: $8.81 billion.
Best Buy’s stock dropped over 8% during morning trading.
In the three months ending May 3, Best Buy’s net income dropped by roughly 18 percent to $202 million, or 95 cents per share, from $246 million, or $1.13 per share, during the same period last year. The company reported earnings of $1.15 per share after deducting one-time costs, such as restructuring charges for its Best Buy Health business.
Revenue for the first quarter decreased from $8.85 billion during the same period last year.
Compared to the previous year, comparable sales—which Best Buy defines as revenue from online sales and stores open for at least 14 months—dropped 0.7 percent. In the United States… A. Comparable sales also decreased by 0.7 percent year over year as consumers purchased fewer drones, appliances, and home theater systems than they did the previous year. Growth in the computing, mobile phone, and tablet categories, according to the company, partially offset the weakness in those categories.
Because it sells iPhones, TVs, laptops, kitchen appliances, and numerous other consumer electronics that are typically made in China or other Asian countries, Best Buy is a brand that is closely watched when it comes to the effects of tariffs. Barry stated during an earnings call in March that the retailer would probably have to increase prices due to the duties.
Barry did note, however, that Best Buy’s import mix has shifted in recent months during a separate earnings call Thursday. Although it still supplies a significant amount of its merchandise, China now only supplies 30 to 35 percent of it, down from the 55 percent it reported in March.
Approximately 25% of its merchandise is sourced from the U.S. S. or Mexico, which, she claimed, are exempt from tariffs because of domestic production. Taiwan, South Korea, Vietnam, and India account for the remaining about 40% and are all subject to a 10% tariff.
The U. A. now imposes a tariff of up to 30 percent on Chinese imports, while the Trump administration’s 25 percent duty on Mexico does not apply to goods that comply with the US-Mexico-Canada Agreement. Following Wednesday’s decision by the federal trade court, it is currently unclear how those rates will alter.
Barry discussed Best Buy’s adjustments to the current tariffs during the Thursday earnings call, although he acknowledged that the situation may change following the court’s decision. About 97 percent or 98 percent of the retailer’s inventory is imported by vendors rather than the business itself.
According to her, Best Buy has negotiated reduced prices, urged suppliers to produce in several nations, and changed the range of products it offers.
Additionally, she emphasized the introduction of new products that could generate enthusiasm and sales. For instance, she stated that the Nintendo Switch 2, a video game console that will launch early this summer, is in high demand. Best Buy, she said, is taking advantage of that by allowing customers to place preorders and opening at midnight on June 5 so they can pick up their consoles or a new game immediately.
Best Buy has also seen success with smartphone sales. According to Barry, AT&T and Verizon have increased their workforces at Best Buy locations. For the first time in three years, the company reported comparable sales growth for mobile phones, and she said phone sales and activations have increased.
Best Buy’s stock has dropped by almost 17% this year as of Wednesday’s close. That is in contrast to the S&P 500’s essentially flat year-to-date performance. On Wednesday, Best Buy’s stock closed at $71 per share, increasing its market value to $15 per share.
