Best Buy Fargo (KFGO file photo)
NEW YORK (AP) — Best Buy, the nation’s largest consumer electronics chain, reported a quarterly drop in sales as Americans continued to tighten their purse strings on appliances and gadgets to focus on essentials.
The Richfield, Minnesota-based retailer lowered its annual sales and profit outlook, underscoring the challenges it faces as it heads into the traditional kickoff to the holiday shopping season. Best Buy’s CEO Corie Barry also warned that shoppers will likely see higher prices on gadgets as they will have to shoulder the higher costs from new pledges by president-elect Donald Trump to impose sweeping tariffs on products from China and Mexico.
During a call with analysts following the earnings report on Tuesday, Barry said that the chain wrestled with economic uncertainty, shoppers’ waiting for deals and the disruption during the run-up to the election, particularly in non-essential categories. The company has seen sales rebound, but Barry noted that the season will be very promotional.
Best Buy kicked off Black Friday sales on Nov. 21, a week earlier than last year, and brought back a version of doorbusters — limited-time-only deals on specific products. It started them Nov. 8 and it plans to make them available both online and in store every Friday through Dec. 20.
“We are managing well what we can control in what remains a volatile environment,” Barry told analysts during the call.
Best Buy, like other retailers, is also bracing for Trump’s threat to impose sweeping new tariffs on Mexico, Canada and China as soon as he takes office as part of his effort to crack down on illegal immigration and drugs.
Barry told analysts and reporters on two separate calls Tuesday that the company believes that diversification of sourcing in consumer electronics is a “good thing but it’s also very hard to do.”
The supply network is complex as well as the fabrication plants for consumer gadgets, she said.
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