Consumers want deals, which leaves Best Buy again predicting little to no growth

Best Buy on Thursday said sales will be relatively flat and profits lower for the year, dragged by tariff costs and “deal-focused” consumers drawn to sales.

The Richfield-based retailer’s quarterly results are a confirmation of what economists have been saying.

People bought computers, cellphones and tablets as new models launched and they had to replace their old ones. But home entertainment systems and appliance sales were lower as consumers put off big discretionary purchases.

Company officials said they expect consumers to continue shopping for bargains but willing to spend more when needed or for innovative products.

Take the Nintendo Switch 2 launch next week.

The company received pre-orders in April, but it doesn’t have a report yet because the sales won’t be counted until next week when they are picked up, CEO Corie Barry said.

Most Best Buy stores will open at 11 p.m. Central time for the June 5 release, with 70% of pre-order customers choosing to pick the Switch up in person. Additional consoles, games and accessories will also be available for purchase at the launch parties.

Some analysts caution it might not be enough to boost sales in the current quarter.

“High-profile product launches like the Switch 2 are going to help, but they sell a lot of different products and it won’t help enough,” Anthony Chukumba, managing director and senior research analyst at Loop Capital, said.

Chief Financial Officer Matt Bilunas said the company has now figured tariff costs — as they stand right now — into its predictions for the year.

He said sales should be relatively flat, falling between $41.1 billion to $41.9 billion. In its last fiscal year, revenue was $41.5 billion.

Profits will likely decline. The company forecasts adjusted earnings per share to range from $6.15 to $6.30, down from $6.37 in the past fiscal year.

Best Buy’s stock ended Thursday at $66.32, down 7.3%.

“Our underlying working assumptions are that tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behavior from the trends we have seen in recent quarters,” Bilunas said.

The company will continue to “scenario-plan” as President Donald Trump’s tariff policy evolves, he said.

Best Buy has tweaked prices based on current tariff rates. Barry said the retailer doesn’t foresee additional price changes if the tariff policy remains the same but acknowledged the “volatile conditions.”

Analysts anticipated some pull-forward of demand from consumers for the quarter to beat any price increases from tariffs. But “if this was the case, it was not as significant as anticipated,” Michael Lasser, UBS analyst, said in a note.

The consumer electronics chain said sales were down less than 1% in its most recent quarter, slightly below what Wall Street analysts predicted.

Restructuring costs, particularly within Best Buy Health, pressured net income, which fell about 18% to $202 million, or 95 cents a share. Analysts were expecting $1.08 a share.

“I’m proud of how our teams have been navigating the environment and planning our business within dynamic macroeconomic conditions,” Barry said. “Against this backdrop, we executed well.”

Barry in a media call declined to comment on a U.S. Trade Court ruling that said Trump overstepped his authority with many of the tariffs he has put in place.

“There remains a great deal of uncertainty,” she said.

“What I’ve tried to work with the team on is to not actually overreact to any given moment in time, but instead to stay maniacally focused on our customers and ensure we are bringing the right assortment price and promotionality to them whatever the backdrop.”

The court put in place a permanent injunction, meaning Trump’s blanket tariffs cannot be enforced. The administration said it would appeal the decision.