Minnesota-based Best Buy Co. warned that tariffs continue to weigh on its business ahead of the crucial holiday shopping season, taking the shine off a quarter in which the electronics retailer boosted sales for the first time in more than three years.

The company reaffirmed its full-year financial guidance on Thursday, breaking from some other retailers that lifted their forecasts in recent days. Best Buy chief financial officer Matt Bilunas said in a statement that its decision was driven by “the uncertainty of potential tariff impacts in the back half, both on consumers overall as well as our business.”

Its shares fell 1.6 per cent as of 9:32 a.m. in New York. Best Buy stock dropped 12 per cent this year through Wednesday’s close.

The tariff comments show the precarious position for a company such as Best Buy, whose product lineup — including appliances, laptops and gaming equipment — make it particularly vulnerable to higher levies on China and other supplier nations. Still, the company said it is confident in its second-half plans and sales are trending toward the high end of its forecast range.

Comparable sales rose 1.6 per cent last quarter, boosted by strong demand for gaming and computer equipment, beating the average analyst estimate compiled by Bloomberg. Revenue of US$9.44 billion and adjusted earnings of US$1.28 a share also beat expectations.

Best Buy has benefited recently from new splashy releases such as the Nintendo Switch 2, helping stem a drop in spending on items such as in-home theater equipment following the pandemic boom. The sales growth snapped a streak of 14 straight quarterly declines.

“Our sales growth momentum has continued into August driven by strong customer response to our back-to-school sales events,” chief executive officer Corie Barry said in the company’s statement.

In a call with reporters, Barry added that “back-to-school tends to be a bellwether for what we see in holiday.”

In June, when the Switch 2 console was first available in stores, Best Buy’s U.S. observed sales rose nearly 10 per cent — the Richfield, Minn.-based company’s best month since March 2021, according to Bloomberg Second Measure, which tracks U.S. transactions made with debit and credit cards.

Other retailers reporting this month attributed sales growth to deal-seeking consumers and back-to-school shopping, despite shoppers’ concerns about inflation and the economic outlook. On Wednesday, Kohl’s Corp. and Abercrombie & Fitch Co. raised their outlook for the year, suggesting consumer spending will continue.

“Top-line growth could emerge this year despite economic uncertainty and a selective consumer,” Bloomberg Intelligence’s Lindsay Dutch said in a note about Best Buy.

Bloomberg.com