Best Buy Shares Fall as 2019 Forecast Trimmed on Tariffs, Maturing Smartphones
Best Buy trimmed 2019 forecasts due to the projected impact of the fourth tranche of U.S. tariffs on Chinese goods that take effect Sunday and again Dec. 15. A more-than-expected “drag” in the videogaming cycle, plus the maturing smartphone category…
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also weighed heavily on the outlook, said executives on a Q2 call Thursday. Shares closed down 8 percent at $63.49. In May, the retailer held to its February FY 2020 revenue guidance of $42.9 billion-$43.9 billion on enterprise same-store sales increases between 0.5 percent and 2.5 percent. Thursday, it shaved the top end of the guidance range to $43.1 billion-$43.6 billion, and cut its same-store sales growth forecast to 0.7 percent-1.7 percent. This is “best estimate of the impact from the List 4 tariffs and the most recent announcement regarding List 3 moving to a 30 percent rate” from 25 percent, said Corie Barry on her first call as CEO. Vendors’ continuing migration out of China will result in a lower impact from tariffs next year, Barry predicted, “because you’re seeing supply chains already start to move.” Computing and mobile phones were 44 percent of Q2 revenue, down a point from Q1.