NEW YORK CITY, New York: Best Buy, the biggest electronics store chain in the U.S., has lowered its forecast for the year. The company is seeing lower profits and flat sales as customers are worried about the economy and ongoing tariff issues.

The company said it expects tariffs to stay at current levels and customer behavior to remain the same for the rest of the year.

Like many other stores, Best Buy is struggling to manage sudden changes in tariffs. Last week, a U.S. court stopped former President Trump’s attempt to place hefty import taxes by saying he went beyond his powers. This added more uncertainty to an already confusing situation. Trump had earlier threatened high tariffs, including a 145 percent tax on Chinese goods, but later cut it to 30 percent in a deal. He also talked about putting a 50 percent tax on all goods from the European Union and a 25 percent tax on smartphones not made in the U.S. On June 1, he delayed the EU tariffs until July 9 to allow more talks.

The company was staying calm and focusing on customers rather than reacting to every piece of news, Best Buy CEO Corie Barry said. She said they are working hard to offer the right products at the right price no matter what happens with trade policies.

To deal with rising tariff costs, Best Buy is asking suppliers to make products outside China. While the company does import some goods directly, it only makes up about two percent to three percent of its product costs. Barry added that product costs passed on to Best Buy are lower than the full tariff rates.

China is still Best Buy’s largest source of products, but its share has dropped from 55 percent to about 30 percent to 35 percent as suppliers move manufacturing elsewhere. Products from the U.S. and Mexico now make up about 25 percent of the company’s costs.

In the three months ending May 3, Best Buy reported a profit of US$202 million, or 95 cents per share. That’s down from $246 million, or $1.13 per share, from the same time last year. When adjusted, earnings were $1.15 per share. Sales dropped slightly to $8.77 billion from $8.85 billion.

Analysts had expected $1.09 per share in earnings and $8.81 billion in sales, so the results were mixed. Sales from stores open at least a year, including online, fell 0.7 percent. Sales of entertainment items, appliances, and electronics were weaker, but computing and mobile phone sales improved.

Best Buy’s stock dropped 9 percent in trading after the report. It now joins other large retailers trying to handle sudden tariff changes. Walmart, the largest U.S. retailer, said it has already raised prices on some products and will raise more this summer. President Trump publicly told Walmart it should “absorb” the cost. Macy’s also lowered its forecast, and Target had worse-than-expected sales in the first quarter.

Best Buy now expects full-year earnings per share between $6.15 and $6.30, down from its earlier estimate of $6.20 to $6.60. Analysts expect $6.13 per share. The company also expects yearly revenue to be between $41.1 billion and $41.9 billion, slightly lower than its earlier prediction of $41.4 billion to $42.2 billion. Analysts were expecting $41.38 billion.