Best Buy the US CE and audio retail giant has cut its sales and profit forecast for the year due to the impact of inflation and Trump Tariffs claim Company executives, the same situation is also impacting CE retailer Dixon’s in the UK, shares in Best Buy fell 8% following the announcement.

Management at the US retailer claim that looming tariffs are impacting margins and that comparable sales could also decline this year as a result of the global trade war, which for a moment yesterday was stopped by a US Court.

As a result of the recent tariffs the company is shifting its supply chain to lower its reliance on China, a major target of Trump’s levies, and negotiating costs with its vendors claims the Wall Street Journal.

Raising prices is seen as a “last resort,” Chief Executive Corie Barry said, adding that the tariff situation seems liable to change at any moment.

“This is such an incredibly fluid situation,” Barry said on a call with analysts. “Trying to snap the line at any given point in time is almost impossible.”

Like JB Hi Fi, & Harvey Norman China remains the top source for products sold in their stores, with Best Buy now moving to cut its product cost exposure to the country to about 30% to 35% from 55% three months ago, the CEO said.

Best Buy also appears to be pressuring brands to switch from manufacturing in China while adjusting its product inventory to lessen the potential impact of tariffs, executives said.

As a result of mitigation tactics, increases in Best Buy’s product costs have been lower than current tariff rates, according to Barry.

While tariffs could change again, Best Buy said its updated guidance is anchored to current rates.

Best Buy now expects $41.1 billion to US$41.9 billion in revenue for the fiscal year, down from its prior outlook for US$41.4 billion to US$42.2 billion, and for comparable sales to rise up to 1% or fall up to 1%, rather than come in flat or up 2% as previously estimated.

For the quarter that ended May 3, sales ticked down about 1% to US$8.77 billion, missing analyst projections for US$8.81 billion, according to FactSet.

Best Buy recorded a profit of $202 million, or 95 cents a share, compared with $246 million, or $1.13 a share, in the same quarter a year earlier.