Best Buy CEO Warns of Price Increases From Tariffs as Stock Drop Follows Q2 Results
Best Buy CEO Hubert Joly said tariffs could lead to price hikes for consumers, during an Aug. 28 earnings call after reporting results for the company's Q2 ended Aug. 4 that was accompanied by a stock decline. “When there’s a…
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price increase, there’s an impact,” he said, though the Trump administration has “very important international trade goals.” Effects from tariffs will be “tightly linked” to gross profit margins, Joly said. A 25 percent tariff on an item with a gross profit of 20 percent will result in a 20 percent price increase, the executive said. He mentioned vendors’ ability to absorb tariffs and over time to diversify their supply bases. The retailer's Q2 online sales growth slowed to 10 percent following 31 percent sales growth in the year-ago quarter over the prior-year quarter, said Chief Financial Officer Corie Barry, underscoring the retailer’s “mature” position in e-commerce. It's gaining market share online, Barry said, now at 15 percent of domestic revenue.