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Footwear stocks are plummeting on Thursday as reciprocal tariffs hit key names within the sector like Nike (NKE).
Shares of the sneaker giant tumbled as much as 13% on Thursday morning and are expected to hit their lowest level since November 2017.
As of April 5, all imports will face a baseline tariff of 10%. On April 9, some 60 countries will get a higher rate. China is facing a 34% reciprocal tariff on top of the 20% tariff already in place, making it a total of 54%. Vietnam is facing a 46%, and Indonesia 32%.
Nike sources 11% of its products from China, 44% from Vietnam, and 21% from Indonesia.
Read more: What Trump's tariffs mean for the economy and your wallet
"What President Trump presented ... was a little bit more aggressive than what I think many people were hoping," Telsey Advisory Group's Joe Feldman told Yahoo Finance. Many retail companies "thought they were off the hook for a while because they didn't have a lot of exposure to China, or not a lot to Canada, Mexico ... [they're] clearly rethinking everything right now."
Prior to Wednesday's announcement, Nike expected tariffs would hit its fourth quarter margins, but only based on the previous 20% duty on China.
"We expect fourth quarter gross margins to be down approximately 400 to 500 basis points, including restructuring charges during the same period last year. We have included the estimated impact from newly implemented tariffs on imports from China and Mexico," CFO Matthew Friend said on its earnings call.
Now, Stifel apparel analyst Jim Duffy estimates that the tariffs could hit Nike's earnings per share this year by $1.69, per a client note.
Other footwear companies taking a hit include Deckers Outdoor Corp. (DECK), Crocs (CROX), On (ONON), and Skechers (SKX), which are down 18%, 17%, 9%, and 20%, respectively.
Most of them, in addition to sportswear names like Lululemon (LULU) and VF Corp. (VFC), are exposed to regions with the highest reciprocal tariffs.
Read more about industry stock moves and today's market action.
William Blair analyst Sharon Zackfia estimates that Lululemon, which sources approximately 54% of its products from China, Vietnam, and Indonesia, will see an impact on margins of roughly 720 basis points.
It remains to be seen how the added costs are spread between suppliers, companies, and customers. Brands can try to negotiate with suppliers to take some of the hit. Other potential mitigation tactics include cost-cutting measures and a higher price for consumers.
"Assuming the full margin hit with no mitigating factors translates to a 25%-plus headwind to our current 2026 EPS estimate," Zackfia noted. Lululemon's stock dropped 13% in morning trading, while VF Corp plunged 23%.