Best Buy Shares Tumble After Earnings Miss, Tariff Concerns
Despite showing a relatively stable, albeit mixed, Q2 2019 earnings report on Thursday, the market reacted quite negatively to Best Buy’s report. Stocks for the consumer electronics big box store—which ranks second on Dealerscope’s Top 101 CE Retailer list—sank 10 percent. In the report, which was the first quarterly earnings call for new CEO Corie Barry, Best Buy beat earnings per share estimates by 9 cents, but missed on quarterly revenue expectations and same-store sales growth.
Of course, much of the response in the markets was also the result of uneasiness from Best Buy’s standpoint on the impact that the impending tariffs will have on some of their core product categories. Barry noted that several major product categories, including televisions, smartwatches, and headphones, will be impacted by the Trump Administration’s 15 percent tariff that goes into effect on September 1. Other categories will see a similar tariff imposed on December 15, including computing products, smartphones, and gaming consoles.
Those are the dates as of right now. However, as has been the case with this administration and its tariff policies, things could change at any moment—which creates a major headache for retailers like Best Buy as it aims to offer revenue guidance moving forward.