Best Buy warned of the possibility of higher prices for American shoppers as President Donald Trump's new duties came into force on Tuesday, while the electronics retailer also grapples with subdued spending on non-essentials, as per a report.
The new 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, while duties on Chinese goods were doubled to 20 per cent, Reuters reported.
"The tariff war that moved into higher gear last night is a big overhang," J.P. Morgan analysts said in a note, ahead of the call.
China remains the number one and Mexico the number two source for products that Best Buy sells, CEO Corie Barry said in the earnings call with analysts.
Shares of the top U.S. electronics retailer reversed earlier gains to be down 1.3 per cent in premarket trading as the pain from tariffs overshadowed a surprise rise in comparable sales during the all-important holiday quarter.
Major U.S. retailers including Target and Walmart have preferred to provide cautious forecasts, citing uncertainty around Trump's latest tariffs.
Target CEO Brian Cornell said in a CNBC interview on Tuesday that prices could increase over the next couple of days for seasonal produce such as avocados as the company depended on Mexico "for a significant amount of supply" in those categories.
But if there's a 25 per cent tariff, those prices will go up ... certainly over the next week, Cornell said.
Best Buy expects fiscal year 2026 comparable sales to be in the range of flat to up 2 per cent, largely below analysts' average expectations of a 1.71 per cent rise, according to data compiled by LSEG. The forecast does not include the impact of recently implemented or proposed tariffs.
Adjusted profit per share is forecast to rise in the range of $6.20 to $6.60, compared to expectations of $6.55.
The company's fourth-quarter comparable sales rose 0.5 per cent, snapping 12 straight quarters of declines as customers took advantage of promotions to snap up high-end appliances and gaming consoles.
Analysts on average had expected a 1.33 per cent drop. The company earned $2.58 per share on an adjusted basis, above estimates of $2.40.
Q1. What do we know about imports from Mexico, Canada, China?
A1. The new 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, while duties on Chinese goods were doubled to 20 per cent, Reuters reported.
Q2. What have Target and Walmart predicted?
A2. Major U.S. retailers including Target and Walmart have preferred to provide cautious forecasts, citing uncertainty around Donald Trump's latest tariffs.
The new 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, while duties on Chinese goods were doubled to 20 per cent, Reuters reported.
"The tariff war that moved into higher gear last night is a big overhang," J.P. Morgan analysts said in a note, ahead of the call.
China remains the number one and Mexico the number two source for products that Best Buy sells, CEO Corie Barry said in the earnings call with analysts.
Shares of the top U.S. electronics retailer reversed earlier gains to be down 1.3 per cent in premarket trading as the pain from tariffs overshadowed a surprise rise in comparable sales during the all-important holiday quarter.
Major U.S. retailers including Target and Walmart have preferred to provide cautious forecasts, citing uncertainty around Trump's latest tariffs.
Target CEO Brian Cornell said in a CNBC interview on Tuesday that prices could increase over the next couple of days for seasonal produce such as avocados as the company depended on Mexico "for a significant amount of supply" in those categories.
But if there's a 25 per cent tariff, those prices will go up ... certainly over the next week, Cornell said.
Best Buy expects fiscal year 2026 comparable sales to be in the range of flat to up 2 per cent, largely below analysts' average expectations of a 1.71 per cent rise, according to data compiled by LSEG. The forecast does not include the impact of recently implemented or proposed tariffs.
Adjusted profit per share is forecast to rise in the range of $6.20 to $6.60, compared to expectations of $6.55.
The company's fourth-quarter comparable sales rose 0.5 per cent, snapping 12 straight quarters of declines as customers took advantage of promotions to snap up high-end appliances and gaming consoles.
Analysts on average had expected a 1.33 per cent drop. The company earned $2.58 per share on an adjusted basis, above estimates of $2.40.
FAQs
Q1. What do we know about imports from Mexico, Canada, China?
A1. The new 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, while duties on Chinese goods were doubled to 20 per cent, Reuters reported.
Q2. What have Target and Walmart predicted?
A2. Major U.S. retailers including Target and Walmart have preferred to provide cautious forecasts, citing uncertainty around Donald Trump's latest tariffs.
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