Best Buy cuts full-year profit and sales guidance amid volatile tariff landscape
Best Buy Co. reported a decline in its first-quarter income and revenue, and, similar to many other retailers, cut its full-year outlook.
“We are updating our full year guidance to incorporate the impact of tariffs,” Best Buy CFO Matt Bilunas stated in the earnings 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.”
The nation’s largest consumer electronics 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. Adjusted earnings per share are expected to range from $6.15 to $6.30, down from its prior guidance of $6.20 to $6.60. Annual comparable sales growth was lowered to a range of down 1% to up 1%.
Best Buy has already raised prices on some items to blunt the costs from tariffs, with the hikes taking effect by mid-May, CEO Corie Barry told analysts on the company’s earnings call
“I want to make the point that due to mitigation efforts by both vendors and by Best Buy, the increased product costs that are flowing to us are lower than the tariff rates,” said Barry, who called price hikes “the very last resort.”
The retailer released its earnings hours before an appeals court reinstated Trump's tariffs the day after a federal court ruling struck down many of them. tariffs.
[READ MORE: Appeals court reinstates Trump's tariffs after a brief pause
“If you look back over the last, let’s call it four months, the variety of points where there has been a change in approach to global trade, they are myriad,” Barry said. “And so what I really tried to work with the team on is to not actually overreact to any given moment in time, but instead to stay maniacally focused on our customers and ensure we are bringing the right assortment price and promotionality to them, whatever the backdrop.”
First Quarter
Best Buy’s net income fell about 17.9% to $202 million, or $0.95 per share, in the quarter ended May 3. from $246 million, or $1.13 per share, in the year-ago period. Excluding one-time expenses, including restructuring charges for its Best Buy Health business, the company reported adjusted earnings of $1.15 per share, topping analysts’ estimates of $1.09 a share.
Revenue fell to $8.77 billion from $8.85 billion, below estimates of $8.81 billion. The company saw growth in growth in the computing, mobile phone and tablet categories, while sales of home theaters and appliances were down from last year.
Comparable sales fell 0.7%. In the U.S., comparable sales also fell 0.7%.
On the call, Barry outlined the company’s strategic priorities, which including launching and growing its third-party marketplace and advertising businesses and improve the customer experience to better connect its digital and in-store businesse. The retailer is on track to launch an “ innovative” improved search experience across its website and app later this year.
“This new experience will have AI powered prompts to guide customers to more specific searches and natural conversational filtering for easier product discovery,” she said.
Barry also spoke enthusiastically about the launch of Nintendo’s Switch 2 video game console, citing strong consumer demand for the item. Best Buy will be one of the only retailers opening their doors at midnight on June 5 for customers to pick up their consoles.
“I would note that 70% of preorder customers elected in store pickup, underlining this important strength,” Barry told analysts. “The midnight opening is not only for preorder customers to pick up their products, there will also be additional consoles, games and accessories available for purchase.”
