Amidst Tariff Concerns, Best Buy Narrows Sale Forecast—Report
The forecast of annual same-store sales for Best Buy Co Inc on Thursday turned out to be less than what the analysts had estimated. The new tariffs imposed on imports from China such as phones and other electronics has been cited as the reason behind this forecast.
The shares of Best Buy which in this month have lost close to 10 percent of their value fell a further 5.4% to reach $65.30 in the pre-market trade due to the consumer electronics retailers’ concerns about the uncertain over the buying behavior of the consumer in the second half of 2019.
While the analysts had estimated a 2% rise in the forecast of same-store sales the company has narrowed the full year forecast to an increase of 0.7% to 1.7%, this was earlier forecast from 0.5% to 2.5%.
Donald Trump, the president of U.S. had earlier said that beginning 1st of October; the tariff would rise to 30% on imports from china worth $250 billion.
Although, Best Buy has said that the said tariffs will only affect just 7% of the cost of its goods which are sold, a further $300 billion imports from China will be subjected to a 15% levy of tariffs and this will significantly affect a large section of the company’s products like laptop and mobile phones.
Last Friday, Trump had announced that the tariffs will be increased from 10% to 15% with the first lot of $125 billion worth of goods all set to get into effect from September 1. These goods include Bluetooth headphones, flat TVs and smart watches.
For the rest of the $300 billion worth goods, tariffs will start setting from the 15th of December as per the office of the trade representative of United States.