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President Trump's tariffs will likely hit retail hard, as most retailers have large exposure to Asian markets.
Senior Reporter Brooke DiPalma joins the Morning Brief to take a look at how tariffs will impact Nike (NKE), Lululemon Athletica (LULU), and Dollar Tree (DLTR).
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Shifting gears now to retail stocks. They are taking hefty losses following the tariff announcement, and Brooke DiPalma has more. Brooke?
Good morning, Julie. Well, one analyst is saying you might want to rethink investments in specialty apparel as these tariffs take effect. That Stifel analyst Jim Duffy told clients in a note this morning, quote, "Until visibility improves, we expect investors show very little appetite for investment in our coverage universe." Think Nike, think Lululemon. Those are among the hardest hit this morning. Shares of both sliding in the pre-market trading as investors really digest the impact that these reciprocal tariffs will have on the countries that both Nike and Lululemon source from. Taking a closer look, Nike, 11% of its products are sourced from China, 44% from Vietnam. On the flip side, for Lululemon, 42% of products were manufactured in Vietnam, 16% in Cambodia, both of which they went to in order to offset that impact in China. Now, China is facing a 34% reciprocal tariff here. Once again, that's on top of the 20% tariff that's already in place. Vietnam facing a 46% reciprocal tariff, and Cambodia 49%. And on top of that, away from specialty retail and into discount, Dollar Tree caught my eye this morning. It's a place where many low-income shoppers are relying on right now. Direct imports made up 41% to 43% of Dollar Tree's total retail value purchases, and China supplies the majority of those imports.