New Tariffs on Chinese Imports to Significantly Impact US Retailers
New 100% tariffs on Chinese imports, starting November 1, are set to significantly impact various US retailers. While some companies like Designer Brands, Stitch Fix, Macy's, The Children's Place, and Kohl's face substantial EPS hits due to high China import exposure, others may find opportunities or minimal impacts.
UBS estimates that the median Softline stock may see a 10% reduction in EPS by 2026 due to these tariffs. Companies with high exposure, such as Designer Brands (-1584%), Tesla (-100%), Apple (-40%), and Nike (-30%), are expected to be most affected. However, they may mitigate this impact over time.
Companies with lower exposure, like Gildan Activewear (0%), TJX (-1%), and Burlington Stores (-2%), are predicted to fare better. These off-price retailers could even benefit from the shift in supply chains. Meanwhile, companies with single-digit exposure are likely to experience minimal negative impacts.
The new tariffs are poised to significantly reshape the retail landscape. While some companies brace for substantial EPS hits, others anticipate minimal impacts or even opportunities. As the situation unfolds, retailers are encouraged to adapt their strategies to mitigate risks and capitalise on potential benefits.
