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Best Buy stuck to its annual sales and profit forecasts on Thursday despite posting quarterly results that topped estimates, as it expects tariff-induced uncertainty in the second half of the year. Shares of the top U.S. electronics retailer fell 5.7% in morning trading, as investors focused on a likely hit to the company’s margins due to higher tariffs on U.S. imports. Several retailers, including Best Buy, have had to raise prices on some goods to absorb the hit from these steep levies. Company executives said the price hikes were lower than the overall rate of tariffs, owing to its mitigation strategies. Best Buy, which sources most of its goods from China, has also made efforts to diversify its supply chain and purchase more products from fewer partners to negotiate better terms in a bid to counter higher costs. Meanwhile, the company’s sales have struggled over the past three years as price-sensitive shoppers put off big-ticket purchases. CEO Corie Barry said customers had become more deal-focused and waited for shopping events such as Black Friday and back-to-school promotions, even though spending remained resilient. “Big-ticket purchases are approached more carefully, though consumers continue to spend on expensive technology when there is a clear need or innovation,” Barry said on a post-earnings call. On a media call with journalists, Barry said that the White House had been open to feedback from Corporate America on the impact of tariffs. Strong sales of Nintendo Switch 2 gaming consoles, which were launched in June, and a surge in demand for artificial intelligence-powered laptops and mobile phones helped reverse a sales decline during the quarter. “Tariffs and a pullback in discretionary big-ticket categories remain a drag, and unlike general merchandise (retailers), Best Buy has limited fallback categories to absorb that pressure,” Emarketer analyst Suzy Davidkhanian said. Comparable sales for the quarter ended August 2 rose 1.6%, the biggest increase in three years. Analysts on average had expected a 0.52% drop, according to data compiled by LSEG. On an adjusted basis, it earned $1.28 per share, compared with the estimates of $1.21 per share. The company expects comparable sales for fiscal year 2026 to range between a 1% drop and a 1% rise and an adjusted profit of between $6.15 and $6.30 per share. Savyata Mishra, Reuters
Category:
E-Commerce
Intel received the $5.7 billion in cash on Wednesday night as part of the deal U.S. President Donald Trump negotiated for a 10% stake in the struggling chipmaker, finance chief David Zinsner said at an investor conference on Thursday. The stake in Intel announced by the U.S. government last week is an incentive for Intel to retain control of its contract manufacturing business, or foundry, Zinsner said. As part of the deal, the government negotiated an additional 5% warrant, should Intel cease to own more than 51% of its foundry operation. I dont think theres a high likelihood that we would take our stake below 50%, Zinsner said. So ultimately, I would expect (the warrant) to expire worthless.” Intel has taken steps to separate its contract chip manufacturing arm, or foundry, from its design business. The company has previously said it could take outside investment in the foundry unit, and it has created a separate management board to govern it. Intel shares were down 0.8% at $24.64 on Thursday afternoon. Arsheeya Bajwa, Max A. Cherney, and Stephen Nellis, Reuters
Category:
E-Commerce
Stocks on Wall Street inched further into record territory in afternoon trading Thursday, following new economic data and a mixed batch of earnings reports from big U.S. companies. The S&P 500 was up 0.2% a day after climbing to a new high. The Dow Jones Industrial Average reversed an early slide to add 40 points, or 0.1%, as of 12:29 p.m. eastern time. The Nasdaq composite was 0.5% higher. Gains in technology and communication services companies tempered declines in health care and most other sectors. Broadcom rose 2.5%, Oracle was 2% higher, and Google parent Alphabet rose 2.1%. Tech giant Nvidia was down 1.2% a day after reporting quarterly earnings and revenue that beat Wall Street analysts forecasts, though the company noted that sales of its artificial intelligence chipsets rose at a slower pace than analysts anticipated. Investors consider Nvidia a barometer for the strength of the boom in artificial intelligence because the company makes most of the chips that power the technology. Its heavy weighting also gives Nvidia outsized influence as a bellwether for the broader market. Shares in several retailers were down following their latest quarterly results. Best Buy fell 5% after the consumer electronics chain’s second-quarter snapshot was overshadowed by an outlook clouded due to the tariffs the U.S. is imposing on trading partners. Despite also posting better-than-expected quarterly results, Urban Outfitters slid 9.7% after the retailer warned that it expects tariffs will increase pressure on its gross margins in the second half of the year. Dicks Sporting Goods fell 4.1% despite reporting second-quarter results that beat analysts’ expectations. Victorias Secret gave up an early gain and was down 1.7% Burlington Stores bucked the trend. The retail chain climbed 7% after its latest earnings topped analysts estimates. Elsewhere in the market, Spam maker Hormel sank 12.7% for the biggest drop among S&P 500 companies after its earnings fell short of Wall Streets forecasts and the company cut its outlook for the year. Traders also had their eye on new government reports on the job market and economy. The Labor Department reported that applications for unemployment benefits fell last week, the latest sign that employers are holding onto their workers even as the economy has slowed. The most recent government data suggests hiring has slowed sharply since this spring. Meanwhile, the Commerce Department reported that U.S. gross domestic productthe nations output of goods and servicesgrew at a 3.3% annual pace in the April-June quarter after shrinking 0.5% in the first three months of this year due to the fallout from the Trump administrations trade wars. The sluggishness in the job market is a key reason that Federal Reserve Chair Jerome Powell signaled last week that the central bank may cut its key interest rate at its meeting next month. Lower rates can boost investment prices and the economy by making it cheaper for U.S. households and businesses to borrow, but they risk worsening inflation. Traders are still betting the Fed will trim its benchmark interest rate at its next meeting in September. Traders see an 85.3% chance that the central bank will cut the rate by a quarter of a percentage point, according to data from CME Group. Friday will bring another update on inflation: the U.S. personal consumption expenditures index. Economists expect it to show that inflation remained at about 2.6% in July, compared with a year ago. Businesses have been warning investors and consumers about higher costs and prices because of tariffs. Treasury yields were mixed in the bond market. The yield on the 10-year Treasury slipped to 4.21% from 4.24% late Wednesday. The two-year Treasury yield, which more closely tracks expectations for Federal Reserve action, rose to 3.64% from 3.62%. European and Asian markets were mixed. Alex Veiga, AP business writer
Category:
E-Commerce
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