Best Buy Co Inc (NYSE:BBY) shares tumbled 14% on Tuesday after the retailer issued a cautious annual outlook, warning of sluggish demand for high-ticket electronics amid tariff concerns and shifting consumer priorities.
The company forecasted annual comparable sales and earnings below market expectations, citing inflationary pressures that are keeping shoppers wary of big purchases like appliances and gaming consoles.
“As we enter financial year 2026, we believe consumer behavior will be largely similar to last year – remaining resilient but still dealing with high inflation that is driving expenses up across their lives, making them value focused and thoughtful about big ticket purchases," said CEO Matt Bilunas.
"And, at the same time, we continue to see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation.
"This leads to our comparable sales guide in the range of flat to 2% growth for the year, with growth weighted more to the second half of the year based on the timing of product launches and initiatives.”
While the retailer saw modest gains in computing and mobile phone sales, analysts warn that price-sensitive shoppers may continue delaying non-essential purchases, adding further pressure to the sector.
For the fourth quarter, earnings were $2.58 per share, down from $2.72.
In morning trading the stock was off $11.88 at $74.82.