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Best Buy's shares, which have lost about 10% of their value so
far this month, fell 5.4% to $65.30 in pre-market trade as
consumer electronics retailer also flagged concerns over
uncertainty related consumer buying behavior in the second half
of the year.
The company narrowed its full-year same-store sales forecast to
a rise of 0.7% to 1.7%, from 0.5% to 2.5%. Analysts had expected
a 2% increase.
President Donald Trump last week said U.S. tariffs on $250
billion worth of Chinese imports would rise to 30% from the
current 25% beginning Oct. 1.
While Best Buy has said those tariffs only affect about 7% of
it's cost of goods sold, a planned 15% levy on a further $300
billion worth of Chinese goods, would hit most of Best Buy's
best selling products, such as cell phones and laptops.
Trump announced the increase to 15% from 10% last Friday, with
the first tranche on over $125 billion of targeted goods
including smart watches, Bluetooth headphones and flat panel
TVs, set to go into effect on Sept. 1.
Tariffs on the remainder of the $300 billion list that includes
cellphones, laptops, toys and clothing will kick in on Dec. 15,
according to the U.S. Trade Representative's Office.
Best Buy's overall same-store sales rose 1.6% in the second
quarter ended Aug. 3, missing analysts estimates of a 2.15%
increase, according to IBES data from Refinitiv.
Revenue rose to $9.54 billion from $9.38 billion, a touch below
expectations of $9.56 billion.
Excluding one-time items, the company earned $1.08 per share in
the second quarter, beating analysts' estimates of 99 cents per
share.
(Reporting by Uday Sampath in Bengaluru; Editing by Tomasz
Janowski)
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