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Retailers like Nike (NKE), Skechers (SKX), Tapestry (TPR), and Ralph Lauren (RL) are in focus as analysts raise concerns about not only the impact of tariffs on imports from China, but also the effects of anti-American sentiment on consumer spending. Yahoo Finance Senior Reporter Brooke DiPalma joins Market Domination Overtime to take a closer look.
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Trump's tariffs spree adding a new layer of pressure for retailers now. Yahoo finances Brook DePalma joins us now with more. Brook.
A good afternoon to you both. As if tariffs weren't enough, anti-American sentiment against US brands is something that has Wall Street concerned as well, particularly looking within retail. Some that have the highest sales exposure in China include Nike, Skechers, Tapestry, and Ralph Lauren. Now, analysts have told me that this could see a small percentage in other regions like Europe and Canada, but they are most concerned about their exposure to China, particularly because US brands have already been struggling in China amid aggressive local competition. You also have a slowing economy there where consumers are also hyper-focused on value and innovation. That's really driving consumer behavior there. If you take a closer look at what Nike saw in the region last quarter, we did see a 17% drop in their net sales. Uh they came in at 1.73 billion, that was compared to 2.08 in the year prior. The CEO said that they see the long-term opportunity there. Of course, this was prior to this coming week. They also said they made significant investments in China. Taking a closer look at Skechers, they also saw a drop in their sales there last quarter. The Skechers CFO, John Vandemar, told investors that China was a drag on international markets there. And so really what we're looking to see here is how much of an impact in the coming months and the coming quarters, will we see from these US brands like Tapestry, Ralph Lauren, but also thinking about fast food, and also other American companies like say Apple and Tesla, how they'll perform in these coming quarters because of this tariff and these negotiations at 125% staying in place right now.
I mean, it's interesting as you say, obviously this is probably most acute in China, but what we've been hearing about also is what's happening in Canada, perhaps because it's more transparent. We're hearing a lot of rhetoric, we've heard things about, you know, that in Canadian grocery stores, for example,
grown in Canada locally produced.
Well, just, well, just like here, when you go to the grocery store, it usually tells you where something is from, right? Produce especially, but other products as well, and in Canada, it does, and people are sort of, there's a backlash against, against American products.
Yeah, absolutely. And, and when you're uncovering this story, of course Lululemon is a Canadian company. And when you think about Lululemon as an American consumer, maybe the fact that it is Canadian doesn't come first to mind. But when I spoke to people, they were saying, you know, Lululemon really also emphasizing that they are a Canadian company. Something to keep in mind there, just something I've been hearing as I spoke to people as well.
Interesting. So maybe the perception of them in a place like China is different. I guess we'll find out.
We'll wait and see.
Yes. Brook, thank you very much.