President Trump’s tariffs are taking a toll on Best Buy (BBY) just as the company is starting to turn sales around.
Best Buy stock plunged 13% on Tuesday as a new round of tariffs was imposed on America’s top three trading partners, Canada, China, and Mexico. The president implemented 25% duties on Canadian and Mexican imports following a 30-day pause. An additional 10% duty on Chinese imports was added after instituting 10% in February.
On a media call, Best Buy CEO Corie Barry said around 55% of its products are sourced from China “in some way, shape, or form,” and another 20% come from Mexico. It does not import from Canada.
Read more: What Trump’s tariffs mean for the economy and your wallet
While vendors “have already been diversifying some of their supply chains,” Barry said consumers seeing the impact is “highly likely.”
Barry projects that a change in prices will take a couple of months to trickle down.
“This isn’t just an overnight change. This is a long process,” Barry told Yahoo Finance on the call. “We expect much more impact in quarters two through four versus this first quarter in terms of increased pricing.”
She said it’s “literally impossible” to know just how much of a hike consumers will see, given the impact will be different for each vendor and each specific item, “all the way down in some cases to the component part.”
At close: March 4 at 4:00:02 PM EST
Telsey Advisory Group analyst Joe Feldman told Yahoo Finance that he wasn’t surprised at the market reaction to Best Buy’s news flow “given the uncertainty related to tariffs” as investors try to wrap their heads around the impact. Best Buy had beat analyst expectations on the top and bottom lines for its fourth quarter and reversed a three-year decline in same-store sales.
But the impact of the tariffs will be far-reaching. “If you think about the conversations about chips, those go into a lot of these products and then that over time translates into cost and that over time translates into price,” Barry said.
She noted consumers’ behavior hasn’t yet changed.
“We are not seeing anything in consumer behavior that says they are buying ahead of the tariffs going in,” she said, adding the chain carries a six-week supply of consumer electronics.
Barry, who is also the chair of the Retail Industry Leaders Association (RILA), said she plans to “make sure” the team is doing everything it can “to just help educate, whether that is the administration, whether that is other government officials” about the impact of these tariffs.
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