Corie Barry, Best Buy CEO, talks with CNBC's Courtney Reagan to discuss the company's most recent quarter, expectations for potential tariff impact, and much more.

Best Buy CEO Corie Barry stated that the company has reaffirmed its financial guidance, despite sales trending toward the higher end of expectations. Barry emphasized the importance of maintaining clear expectations amid ongoing consumer volatility and significant periods remaining in the fiscal year. She noted that while categories such as gaming and computing have shown strength, appliances and home theater have been weaker, reflecting broader consumer trends away from larger projects.

Barry also discussed the company's approach to health technology, the impact of tariffs, and evolving store formats. She highlighted Best Buy's ability to mitigate tariff effects through assortment strategies and supply chain diversification. The company is experimenting with both experiential flagship stores and smaller format locations to reach new markets and customer segments.

Best Buy CEO: Reaffirming guidance allows us to set expectations

Let's get to some retail in the state of the consumer here at Post 9 this morning. Joining us is our own Courtney Reagan along with Best Buy CEO Corey Berry. Morning, Courtney. Morning. Thank you for having us here. And Corey, thank you for being here. Obviously, you just reported earnings last week. You talked about your guidance going forward. Always a lot of focus on it. But you guys have a good quarter. And you're saying your sales are trending towards the higher end of expectations. So why just reaffirm? Is that just Best Buy's sort of history of conservatism? Or is there a real worry about the impact of tariffs on your business and the consumer? I think we can all agree there is still a lot of volatility in the consumer, different signals depending on consumer segments. And though I think we felt like it was really important to say we do have confidence. We feel confident in that high end. We feel confident with our current results. And at the same time, we wanted to acknowledge there is still a lot of the year left to go, some of the most important time of the year. And this gives us, I think, some room to make sure we feel like no matter what happens, we can be clear about what our expectations are. In the quarter, you talked about how gaming was strong and computing was strong. Some weakness in appliances and home theater. Somewhat echoing what we heard from Home Depot's and Lowe's, saying consumers are just not tending towards those bigger projects right now. But for so long, health tech was such a big part of your business. And I didn't hear that much about it on the call. I think health tech is still a really important part of the business, a slightly smaller sliver. But if you think about all of us taking our own health care into our own hands, whether it's something like the Oura Ring or something like the Apple Watch, you have this opportunity to day in and day out, as mine showed me this morning, manage your stress levels, manage how you sleep, manage your own health. That's not going to slow down. Every ounce of investment is going toward more health care management. I think we're just tailoring our approach so that we can both focus on new health tech, but also an aging consumer and all of the things technology can do for someone who might want to age in their home. Sometimes I don't want to know all of those health stats. I know. I haven't moved in a while. Thank you. Yeah, this morning was rough. Got it, got it. AI, we talk so much about AI, but more sort of on the enterprise side when we're talking here at CNBC. How much education does a consumer need about AI, how it can help them in their life, and thus, which devices to buy to do so? I think this, for us, is a really sweet spot. And part of the reason I think computing, we've seen computing grow for six straight quarters now. So this isn't just a flash in the pan. What happens in our business is there's a need to replace and upgrade, and then that intersects with innovation, something like AI, or even something like the Windows 10 upgrade cycle that's coming here in October. That's where our sweetest spot is. We can lean in with our vendors and help tell their story. We can lean in with our blue shirts and our Geek Squad agents to help someone in the store. We can make sure the digital experiences are very clear about what the advantages might be. It's those moments. And we're starting to see more of those because we did talk about gaming growth. We talked about computing. We talked about mobile phones. We talked about wearables. We talked about headphones. A lot of these categories where people start to want to upgrade what they bought maybe four or five years ago at the height of the pandemic, this is a really good spot for us to try to be helpful. What about tariffs? I know this is an issue for you. How much are we seeing prices rise across the portfolio of what consumers are paying, and has there been any demand destruction because of it? Yeah, the good news is I'm really proud of the work our team has been doing. I'm also really focused on how to be there for the customer. The thing that's a little bit different in consumer electronics, our team is always focused on having the broadest assortment from opening price point to really premium products. And because of that, we're very good at moving assortments around. And so there's a number of mitigation strategies. Some of the supply chains have been diversified. Our partners are diversifying which countries they choose to come from. We're working on different assortment strategies. We're always working on pricing and the components that actually go into these devices. All of those mean we can always offer a very broad assortment. So the effective calculated tariff rate right now is probably about 16% for what we sell. What we're seeing is materially lower than that, and it's not across all the categories. And so I think the team's just doing a good job, like we always do, making sure we have this really broad assortment because we're a pretty infrequent purchase. You maybe come to Best Buy to get a computer once every four or five years. It's not quite like eggs where you know the price goes up distinctly every week. This is more about what components, what are the features, what are the innovations, and then what's my budget. And as long as we have something for you and your budget, that is the main focus for us. New store development, rural versus urban, more square footage, less square footage, is it evolving at all? It's evolving massively. And I love the splits that you have. There are some places where we actually can diversify more. And so we're working on a smaller footprint store that maybe can augment a market like Miami or Atlanta, where we've seen a lot of growth, or can go into a new market. We just opened a new store in Bozeman, Montana. Because it's a format that can actually work in a smaller setting, you can garner customers you wouldn't otherwise be able to reach. And so we're playing with really experiential, all the bells and whistles stores in partnership with our vendors, and at the same time, some that might be a little bit leaner and serve a customer we couldn't otherwise reach.

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