EDMONTON, Alberta — Best Buy is facing significant challenges as it reported lower-than-expected quarterly revenues and revised its full-year sales outlook downwards due to increased costs linked to tariffs. The consumer electronics retailer anticipates fiscal 2026 revenues to be between $41.1 billion and $41.9 billion, a reduction from its previous estimate of $41.4 billion to $42.2 billion. The company’s projection for adjusted earnings per share has also shifted, now expected to be $6.15 to $6.30, compared to earlier guidance of $6.20 to $6.60.

Chief Financial Officer Matt Bilunas indicated that the revised outlook accounts for the current tariff rates, suggesting stability in consumer behavior based on recent trends. He noted that Best Buy will continue to adjust its strategies as circumstances evolve, emphasizing the importance of agility in a changing market.

The impact of trade policies has been significant for Best Buy and other U.S. companies reliant on global supply chains. The company joins several others, including Abercrombie & Fitch and Macy’s, which have recently lowered their profitability forecasts due to tariff-related costs. Meanwhile, some businesses, such as E.l.f. Beauty, have opted not to provide full-year guidance amid uncertainties surrounding these tariffs.

In her remarks, CEO Corie Barry outlined strategic priorities set to enhance profitability and efficiency. Best Buy aims to improve customer experiences by better integrating its online and brick-and-mortar operations, while also expanding its third-party marketplace and advertising ventures to drive growth.

In the fiscal first quarter, Best Buy reported earnings of $1.15 per share, surpassing analyst expectations of $1.09, although revenue fell short of projections. The company generated $8.77 billion in revenue, compared to the anticipated $8.81 billion. Net income for the quarter declined roughly 18% to $202 million, or 95 cents per share, down from $246 million, or $1.13 per share, during the same period last year.

Comparable sales, reflecting revenue from stores open for at least 14 months, declined by 0.7% year-over-year, with a similar drop in U.S. sales attributed to reduced demand for home theater systems, appliances, and drones. However, notable growth was recorded in sectors like computing and mobile devices, providing some offset to the downturn.

Best Buy is particularly sensitive to tariff impacts, given its significant product lines, including iPhones and laptops, which predominantly originate from China and Mexico. Barry previously mentioned that approximately 55% of its merchandise is sourced from China, with another 20% coming from Mexico. She has also indicated that rising tariffs may necessitate price increases on products offered to consumers.

Currently, U.S. tariffs on Chinese imports stand at 30%, while products that meet the United States-Mexico-Canada Agreement requirements are exempt from a 25% levy on goods from Mexico. The future of these tariffs remains uncertain following a federal court’s recent ruling that overturned several of the previous administration’s tariffs.

As of the latest stock market close, Best Buy’s shares have decreased nearly 17% since the beginning of the year, lagging behind the S&P 500’s performance. The company’s stock closed at $71.52, resulting in a market valuation of approximately $15.14 billion.