Best Buy slumps after tariffs threaten to upend its return to same-store sales growth

Best Buy fell 10% in early trading even after sales and earnings topped analysts’ estimates as the company’s recent return to same-store sales growth is being thrown into jeopardy by trade barriers.

The retailer reported $13.95 billion in fourth-quarter revenue before market open on Tuesday, marking a 4.8% fall from the year before and besting consensus estimates of $13.69 billion according to analysts polled by Bloomberg. Adjusted earnings per share of $2.58 also beat consensus estimates of $2.40.

Same-store sales, meanwhile, notched a surprise rise, up 0.5% to trounce analysts’ expectations for a 1.4% decrease and the company’s own forecast of a fall as big as 3%. The figure, led by particularly strong interest in Best Buy’s computing and consumer electronics, marks the retailer’s first rise in comparable sales in a dozen quarters as it has struggled to maintain a pandemic-era boom in home and appliance sales. The stock has suffered as a result, losing over a third of its value since an all-time high in 2021.

Looking forward, Best Buy forecast revenues between $41.4 billion and $42.2 billion this year, with comparable sales in a range of flat to 2% growth after a three-year streak of annual declines.

That nascent return to growth is threatened by trade barriers: CEO Corie Barry called international commerce “critically important” and flagged that China and Mexico are the top two sources for products Best Buy sells. However, the company’s forward-looking estimates don’t include tariff impacts. President Donald Trump imposed an extra 10% tariff on China starting today, adding to the 10% levy that took effect on February 4.

That first round of tariffs on China would subtract about 1 percentage point from same-store sales, Best Buy estimates, if sustained for the full year.

In the past year, shares have gained about 12%, trailing the S&P 500’s 14% gain over the same period.