Best Buy warns tariffs may drive up prices

Dive Brief:

• Best Buy’s fourth-quarter revenue fell 4.7% year over year to $13.9 billion, while comparable sales rose 0.5%, the company reported Tuesday. Domestic revenue fell 5% to $12.7 billion.
• The company saw operating income decline 61.3% from the year-ago period to $217 million and net income fall about 75% to $117 million.
• Although Best Buy’s Q4 performance beat analyst and company expectations, the first quarter and fiscal year are uncertain as tariffs are likely to drive up prices for consumer electronics, CEO Corie Barry said during a Tuesday earnings call.

Dive Insight:

On March 3, President Donald Trump ordered 20% tariffs on products from China. The next day, 25% tariffs on imports from Canada and Mexico took effect, although the duties have since been delayed until April 2 for imports covered by the United States-Mexico-Canada Agreement.

“The consumer electronics supply chain is highly global, technical, and complex,” Barry said according to a call transcript. “China and Mexico remain the No. 1 and No. 2 sources for products we sell, respectively. While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”

Best Buy issued guidance for the upcoming fiscal year that forecasts revenue ranging from $41.4 billion to $42.2 billion and comparable sales ranging from flat to 2%. But the company said its latest fiscal outlook doesn’t reflect the effects of recently enacted tariffs because there’s still uncertainty about the details and the response it will draw from U.S. consumers and international trading partners.

However, Barry said based on the company’s analysis, if the 10% tariffs on products from China that began