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Aug 29 (Reuters) - Best Buy Co Inc forecast annual same-store sales below analysts’ estimates on Thursday, citing new U.S. tariffs set to be imposed on Chinese imports, such as phones, video game consoles and other electronics.
Best Buy’s shares, which have lost about 10% of their value so far this month, fell 5.4% to $65.30 in pre-market trade as consumer electronics retailer also flagged concerns over uncertainty related consumer buying behavior in the second half of the year.
The company narrowed its full-year same-store sales forecast to a rise of 0.7% to 1.7%, from 0.5% to 2.5%. Analysts had expected a 2% increase.
President Donald Trump last week said U.S. tariffs on $250 billion worth of Chinese imports would rise to 30% from the current 25% beginning Oct. 1.
While Best Buy has said those tariffs only affect about 7% of it’s cost of goods sold, a planned 15% levy on a further $300 billion worth of Chinese goods, would hit most of Best Buy’s best selling products, such as cell phones and laptops.
Trump announced the increase to 15% from 10% last Friday, with the first tranche on over $125 billion of targeted goods including smart watches, Bluetooth headphones and flat panel TVs, set to go into effect on Sept. 1.
Tariffs on the remainder of the $300 billion list that includes cellphones, laptops, toys and clothing will kick in on Dec. 15, according to the U.S. Trade Representative’s Office.
Best Buy’s overall same-store sales rose 1.6% in the second quarter ended Aug. 3, missing analysts estimates of a 2.15% increase, according to IBES data from Refinitiv.
Revenue rose to $9.54 billion from $9.38 billion, a touch below expectations of $9.56 billion.
Excluding one-time items, the company earned $1.08 per share in the second quarter, beating analysts’ estimates of 99 cents per share.
Reporting by Uday Sampath in Bengaluru Editing by Tomasz Janowski