By Denny Jacob

Best Buy said U.S. consumers are likely to face higher prices as vendors throughout its supply chain work through the impact of the latest set of tariffs, a scenario that may crimp demand for electronics.

"While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely," said Chief Executive Corie Barry.

China and Mexico are the top two sources for products the consumer-electronics store chain relies on. On Tuesday, President Donald Trump's 25% tariffs on goods from Mexico and China took effect, and he imposed a 10% levy on Chinese imports. Both countries hit back, with China implementing retaliatory measures on goods such as food and technology.

The measures threaten to cause consumers to further delay purchases on computers, video game consoles and other big-ticket electronics. Best Buy and other electronics retailers expected demand for PCs to pick up with overdue upgrades, as well as potential catalysts from Nintendo's new gaming console and other anticipated releases including Take-Two Interactive Software's "Grand Theft Auto VI."

Best Buy on Tuesday reported higher-than-expected sales in its latest quarter and said consumers are looking for value, but are still willing to spend on high-priced electronics. The company said its guidance for the fiscal year doesn't include the impact of recently implemented or proposed tariffs.

The Minneapolis chain forecast full-year revenue between $41.4 billion and $42.2 billion, as well as adjusted earnings per-share in the range of $6.20 to $6.60. Wall Street expects revenue around $41.75 billion and adjusted earnings of $6.58 a share

Comparable sales are expected to range between flat to 2% growth for the year, with growth weighted more to the second half of the year.

Still, the market for PCs has begun to improve as consumers and businesses alike look to replace older models they have held onto for longer than average in response to a run-up in prices.

For the quarter ended Feb. 1, Best Buy reported earnings of $117 million, or 54 cents a share, down from $460 million, or $2.12 a share, in the prior-year period.

Stripping out certain one-time items, earnings came in at $2.58 a share. Analysts polled by FactSet had expected $2.40 a share.

Revenue declined to $13.95 billion from $14.65 billion. Analysts polled by FactSet had expected $13.68 billion.

Shares were down 4.9% at $82.50 in premarket trading Tuesday. The stock is down around 1% over the last year.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

Shares tumbled 14% to $74.55. The stock is down nearly 4% over the last year. "Best Buy Warns of Higher Prices as New Round of Tariffs Takes Effect -- Update," at 9:40 a.m. ET, posted the incorrect figures for Best Buy's share activity.

(END) Dow Jones Newswires

March 04, 2025 10:29 ET (15:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.