March 3 (Reuters) - Best Buy (BBY.N) signaled a lower U.S. tariff rate following the Supreme Court's decision to strike down the government's emergency levies but has not modeled "major impacts" from the change in this year's outlook.
Swiss sportswear On Holding earlier in day also highlighted lower duties after the U.S. imposed a temporary 10% tariff last week. The administration plans to lift it to 15%.
Shares of Best Buy (BBY.N) were trading up 7% amid a slump in the broader markets, as investors focused on a strong profit beat for the holiday quarter.
TARIFF UNCERTAINTY
"There's still a lot of moving pieces, there's still a lot to be figured out," CEO Corie Barry said on a post-earnings call, referring to the tariffs.
Best Buy, which imports about 55% of products from China, said it has been negotiating costs, diversifying its supply chain and adjusting assortments to mitigate the impact from tariffs. The retailer said it would make price adjustments as a last resort.
"In some cases, we might narrow our assortment so we absolutely know we have the more rationalized assortment to meet their needs," Barry said on a call.
The retailer projected full-year comparable sales to be down 1% to up 1%, compared with analysts' estimates of a 1.63% rise.
Its adjusted earnings per share forecast range of $6.30 to $6.60 was also below estimates of $6.66.
"The guide signals modest growth with overall demand normalization - which was better than feared," Evercore ISI analyst Greg Melich said.
COST CUTS DRIVE PROFIT BEAT
In the all-important holiday quarter, comparable sales declined 0.8%, with Barry flagging softer customer demand for the industry.
Best Buy has been under pressure as Americans grappling with rising living costs - driven in part by tariffs and an uneven labor market - prioritize value and delay big-ticket purchases such as home theater systems and appliances.
However, the company managed to trim costs during the reported quarter, including lowering expenses at Best Buy Health in the U.S.
Its cost of sales came in at $10.93 billion in the three months ended January 31, down from $11.03 billion a year earlier.
Newer initiatives like marketplace and Best Buy ads also helped grow profits, despite higher promotions.
On an adjusted basis, the company posted quarterly profit of $2.61 per share, compared with analysts' estimates of $2.47, according to data compiled by LSEG.
"Best Buy delivered a fourth quarter that underscored the company's operational resilience in a challenging consumer environment, though the results revealed the mounting headwinds facing the business as it enters fiscal 2027," said Ana Garcia, analyst with CFRA Research.
Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sriraj Kalluvila