Best Buy’s Q1 FY26 print captured a familiar retail tug-of-war: disciplined cost controls helped the company beat on earnings, yet tepid demand and fresh tariff worries forced a trim to full-year guidance and sent the shares sliding roughly 5 % in early trading. Adjusted EPS of $1.15 topped the Street’s $1.09, but revenue of $8.77 bln missed by a hair and fell year-on-year, underlining how the big-ticket electronics cycle remains soft. Management now assumes the newly reinstated 10 % Trump-era tariffs linger all year, eroding pricing power just as consumers grow more value-conscious.

• Same-store sales declined 0.7 %, slightly worse than the –0.6 % consensus and the fourth straight quarterly drop.
• Imports from China still account for 30–35 % of cost of goods; CFO Matt Bilunas said promotional tweaks can blunt—but not offset—tariff-driven cost inflation.
• FY26 guidance cut: revenue now $41.1–$41.9 bln (was $41.4–$42.2 bln); adjusted EPS $6.15–$6.30 vs. $6.20–$6.60 prior; comp-sales view tightened to –1 % to +1 % from flat to +2 %.
• Management still expects comps to inflect positive in 2H as new phone and gaming console cycles arrive, but acknowledged “no material change” in consumer behavior so far.
• The stock, down ~17 % YTD and hovering near $70, trades at ~11× the midpoint of the new EPS range—well below its five-year average P/E of ~15.
• Dividend yield sits above 4 %, providing a cushion but limiting the buyback fire-power should tariffs bite deeper.

Bottom line: Best Buy remains a cash-generative retailer with a loyal membership base, but tariff exposure and a slow CE demand backdrop cap near-term upside. If Washington softens trade policy—or if holiday launches spark the long-awaited replacement cycle—the shares could rebound toward the mid-$80s (roughly 13× forward earnings). Absent relief, they are likely to meander in the $65–$75 channel while investors wait for clearer signals on comps and margin trajectory.