Despite its customers’ resilience, Best Buy expects sales to dip this year because of tariffs.
The electronics retailer released quarterly earnings Thursday (May 29), projecting yearly revenue of $41.1 billion to $41.9 billion, below past guidance of $41.4 billion to $42.2 billion.
Best Buy has warned that its vendors could pass along higher costs to the chain, which would mean raising prices.
Executives said Thursday that the company is adjusting its supply chain to reduce its dependency on China, a subject of some of the steepest tariffs, while also negotiating with its vendors on costs.
Raising prices is seen as a “last resort,” CEO Corie Barry told analysts on an earnings call, describing the tariff situation as “incredibly fluid.”
“Trying to snap the line at any given point in time is almost impossible,” she said.
The CEO outlined the various ways tariffs impact the company’s products. Consumer electronics shipped from Mexico are compliant with the USMCA trade agreement and are not subject to tariffs.
Products from China are subject to the so-called “fentanyl” tariff of 20%, covering products including mobile phones and computers. Major and small appliances, gaming consoles, furniture and accessories are subject to the 20% fentanyl tariffs, as well as the recently instituted 10% baseline tariff.
Lastly, consumer electronics products from countries such as Vietnam, India, South Korea and Taiwan are subject to a 10% tariff.
How all this affects consumers is an open question, Barry said, even as she insisted on their continued resiliency.
However, “we’ve been very clear to say they are making trade-offs in their spend, and their budget decisions based on higher prices across many areas of their lives,” she said. “And I think while tariffs is perhaps an additional one, there’s been a great deal of inflation up to this point. So this isn’t just a conversation about tariffs. We’ve been very clear in saying consumers are making trade-offs, and we can see that within our categories.”
Meanwhile, the tariff situation has both consumers and CEOs feeling pessimistic, PYMNTS reported Thursday.
New inflation figures showed consumer spending slowing to +1.2%, “with noticeable pullbacks in durable goods (particularly vehicles) and in services like recreation and financial services,” that report said.
The Conference Board Measure of CEO Confidence, also released Thursday, showed the headline number falling by 26 points to a reading of 34 — its lowest level since late 2022 and the sharpest quarter-over-quarter drop in the survey’s nearly 50-year history.
