Best Buy (BBY) is turning around a three-year decline in sales growth — but it’s not enough to keep investors anxious about tariffs on consumer electronics satisfied.
Shares plummeted 13% on Tuesday as investors digested the «uncertainty of tariffs» and their potential impact, Telsey Advisory Group Joe Feldman told Yahoo Finance. Feldman said he wasn’t surprised at the market reaction, adding, «excluding tariffs, the 2025 guidance was solid.»
A second round of tariffs from President Trump started on Tuesday, with new duties on America’s top three trading partners: Canada, China, and Mexico.
The president imposed 25% duties on Canadian and Mexican imports following a 30-day pause. He also implemented a second round of 10% duties on Chinese imports after instituting 10% in February.
Best Buy CEO Corie Barry said on an earnings call that China and Mexico are its top two sources for products.
«Let’s call it about 55% of what we sell is sourced through China in some way, shape or form, and another approximately 20% comes through Mexico,» she said. «Which means the vast majority of the product assortment that we have in some way, shape, or form right now is subject to some level of tariffs.»
Read more: What are tariffs, and how do they affect you?
She added that if the initial 10% tariff on China were to stay in effect, it would have a «negative impact in the ballpark of 1 point of comparable sales.» The second quarter to fourth quarter results would feel the brunt of that, she said.
Best Buy did not specify what sort of price increase would go into effect.
The tariffs come at a key inflection point for Best Buy.
The replacement cycle is kicking in around laptops, notebooks, and phones, especially as innovation around AI ramps up. Evercore analyst Greg Melich called the year a «sweet spot» for the four-to-five-year replacement cycle since the pandemic spending spree started in 2020.
Barry said the Geek Squad played a key role in helping «customers understand what is unique about Copilot+ AI PCs» or seeing if they want to upgrade ahead of the «upcoming Windows 10 upgrade cycle.»
«We continue to see a consumer that is willing to spend on high-price-point products when they need to or when there is technology innovation,» CFO Matt Bilunas said in a statement.
Here’s what Best Buy posted in the fourth quarter, compared to Bloomberg estimates:
Adjusted earnings per share: $2.58, versus $2.40
Net sales: $13.95 billion, versus $13.69 billion
Story Continues
