Best Buy Will Try to Get Administration to Minimize Tariffs' Impact, CEO Says
Best Buy will “actively” engage in helping the Trump administration “continue to minimize the impact of tariffs on U.S. consumers,” said CEO Hubert Joly on a fiscal Q1 earnings call Thursday. There’s “time” for U.S.-China trade talks “to progress before…
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any decision gets made” on the fourth tranche of American tariffs on that country, he said. It's “premature” to speculate about the possible impact of the List 4 tariffs on $300 billion in Chinese goods because there are too many uncertainties about the threatened duties, he said on his final call as CEO before relinquishing the helm next month to Chief Financial Officer Corie Barry. “One thing is, of course, certain,” Joly said. “The impact of tariffs at 25 percent will result in price increases and will be felt by U.S. consumers.” As List 3 tariffs increased to 25 percent, “the discussion becomes quite different,” said Barry. "There’s a much lower likelihood you could absorb that as a vendor.” At 25 percent, “there will be higher prices for consumers,” she said. It’s “tricky” figuring out how the tariffs “will actually play into the back half” of calendar 2019, said Barry of tranche 3 tariff mitigation. “We did our very best to strategize it, but there’s still a lot of work.” Meanwhile, the retailer bought the Critical Signal Technologies health services company this month to “help scale” its connected-health business. “We’re excited about the prospects of combining CST’s services and relationships” with GreatCall, the connected-health and personal emergency response services business that Best Buy bought last year (see 1808150071), said Joly.