Best Buy Shares Drop as Company Lowers Forecast Citing Tariff Pressures

Best Buy’s stock dropped Thursday morning after the retailer posted a mixed set of quarterly results and reduced its financial expectations for the year ahead. The company blamed U.S. tariffs and uncertain shopping trends for the downgrade.

Sales at stores open for at least a year slipped 0.7% from the same time last year, a sharper drop than analysts had predicted. Total revenue fell by nearly 1% to $8.77 billion, slightly below the expected $8.80 billion. Despite the dip in sales, Best Buy reported adjusted earnings of $1.15 per share, which came in better than Wall Street's forecast of $1.09.

CEO Corie Barry said the company is working through what she called “challenging economic conditions.”

Best Buy now expects to bring in between $41.1 billion and $41.9 billion in revenue for 2025 — lower than its previous range of $41.4 billion to $42.2 billion. It also cut its profit outlook, expecting adjusted earnings per share to land between $6.15 and $6.30, down from a prior estimate of $6.20 to $6.60.

Chief Financial Officer Matt Bilunas explained that these new projections reflect the impact of tariffs, particularly those affecting goods imported from China and Mexico. Together, those two countries account for around 75% of Best Buy’s product supply chain.

The company also scaled back its expectations for same-store sales this year. It now sees sales either falling by 1% or rising by up to 1%. Previously, the range was flat to up 2%.

Bilunas said the guidance assumes no major changes to current tariffs and expects shoppers to behave similarly to recent trends.

Best Buy shares fell about 3% in pre-market trading following the update and are now down over 16% so far this year. In comparison, the broader S&P 500 index has remained mostly unchanged.

Q1 Snapshot:

• Adjusted EPS: $1.15 (vs. $1.09 expected)

• Revenue: $8.77 billion (vs. $8.80 billion expected)

• Same-store sales: -0.7% (vs. -0.57% expected)

• U.S. same-store sales: -0.7% (vs. -0.62% expected)

Performance by Category:

• Appliances: Down 8.1%

• Entertainment: Down 13.3%

• Consumer Electronics: Down 5.2%

• Computing & Mobile Phones: Up 5.8%

• Services: Up 0.9%

• International Sales: Down 0.7%

Trade policy remains a key concern for the company. Barry noted in a prior call that the majority of Best Buy’s products are tied to China and Mexico — regions impacted by U.S. tariffs. Recently, the government eased some tariffs for a short 90-day period, and a trade court has blocked some of the Trump-era tariffs, but the overall situation remains uncertain.

Barry also warned that the heavier impact from tariffs would likely be seen in the second half of the year. While analysts like Joe Feldman of Telsey Advisory Group expect a slight improvement in sales next year, others are more cautious.

Wedbush’s Matthew McCartney pointed out that Best Buy’s reliance on China makes quick supply chain changes difficult, adding that any sharp rise in electronics prices could put further pressure on the company’s top line.

Despite the current challenges, some analysts believe Best Buy’s strong position in the electronics space could help it weather the storm and regain momentum down the road.

Also Read: Stock Market Today: Dow, S&P 500 & Nasdaq Rally as Trump Delays EU Tariffs