As trade wars accelerate and the 'Bidenomics' hangover unfolds, several companies sounded the alarm this week over President Trump's expanding tariff policies, warning of higher prices and gloomy consumer sentiment. Target cited concerns over tariffs and consumer uncertainty. Now, Best Buy has followed suit. 

Goldman analysts Kate McShane, Mark Jordan, and others told clients that consumer electronics retailer Best Buy's fourth-quarter earnings and revenue exceeded expectations, while its full-year guidance for FY26 was in line with consensus.

BBY reported 4Q25 adj. EPS of $2.58, above the GS estimate of $2.45 and consensus (Refinitiv) of $2.40. Sales decreased -4.8% y/y to $13.9bn and enterprise comparable sales increased 0.5% y/y, above the GS estimate of -0.3% and consensus of -1.3%. Domestic online comparable sales increased 2.6% y/y and accounted for 39.5% of domestic sales, up from 38.0% during the prior year. Adj. EBIT margin decreased 7 bps y/y to 4.9%, above GS estimate of 4.8% and consensus estimate of 4.7%.

Management provided 1Q26 guidance for a comparable sales to be slightly down y/y (vs. consensus of +0.41%), and for adj. EBIT margin to be ~3.4% (vs. consensus of 3.7%). BBY also provided FY26 guidance, including revenue of $41.4bn-$42.2bn (vs. consensus of $41.82bn), comparable sales of 0.0%-2.0% (vs. consensus of +1.71%), adj. EBIT margin of 4.2%-4.4% (vs. consensus 4.29%), and adj. EPS of $6.20-$6.60 (vs. consensus of $6.55). Further, BBY expects capital expenditures to be $700mn to $750mn, and an effective tax rate of 25.0%. The company expects comp growth to be 2H weighted based on timing of product launches and initiatives.

Separate from the Goldman note, Best Buy CEO Corie Barry warned investors during an earnings call that tariff wars will send prices higher for consumers:

"Trade is critically important to our business and industry, the consumer electronic supply chain is highly global, technical and complex.

"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."

Commenting on the full-year outlook, Best Buy CFO Matt Bilunas stated:

"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. 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." 

Remember that the guidance does not account for the impact of the additional 10% tariff on China, plus 25% duties on goods from Mexico and Canada. CEO Barry pointed out that 60% of the cost of its goods comes from China and Mexico. 

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