Wolfe Research said President-elect Trump’s tariff plans threaten the outlook for some consumer goods stocks, including many popular apparel and home furnishings retailers. Trump’s tariff plans have added to market uncertainty in recent weeks. The tariffs could make the Fed’s job more difficult this year because they risk reigniting inflation if the costs are passed on to consumers in higher prices. The president-elect has proposed a variety of options, including a blanket tariff of 10% to 20% on all imports, a 25% tariff on imports from Mexico and Canada, and a 60% or higher surcharge on goods from China. . As investors wait and see, Wolfe Research highlights dozens of companies that could be hurt if 10% general tariffs are imposed, or if Trump imposes 60% tariffs on China, or both . “With tariffs being a key policy tool of the Trump presidency, we focus on Highlighting our basket of tariff stocks: “We believe that tariff risks are not priced into stocks overall and we expect a basket of stocks to trade on tariff news in the coming weeks/months following Trump’s inauguration. “Recent reports indicate that the Trump administration’s economic team is currently discussing several ways to gradually increase tariffs month by month in order to have the greatest impact while avoiding a spike in inflation,” Bloomberg reported on Tuesday, citing people familiar with the matter. One of the proposals would be to issue a tariff schedule under the International Emergency Economic Powers Act that would raise import duties on trading partners by 2% to 5% each month, the report said. Take a look at some of the countries Wolf believes may be hit by these plans. Stocks: Lululemon Athletica, Abercrombie & Fitch and American Eagle Outfitters are among several apparel retailers the company lists in its basket of tariff stocks, which each received a fourth upgrade on Monday after seeing a strong holiday shopping season. Quarterly earnings are expected. But their stock prices fell, indicating that investors may be growing tired of the retailer’s slowing growth rate. As of Wednesday’s close, Lululemon’s shares were down 4.8% so far this week, while Abercrombie’s shares were down 19.2%. Abercrombie, which also owns the Hollister and Gilly Hicks brands, has been hit particularly hard this week as Wall Street questions whether its rapid growth is nearing an end. It expects full-year sales to rise 15%, the upper end of its forecast range, however. Sales will rise 7% to 8%. That’s higher than previous expectations of 5% to 7%, but the growth is well below last year’s 21% holiday sales growth. Both retailers are closely monitoring Abercrombie & Fitch’s performance. Pay attention to the impact of tariffs. Abercrombie said in late November that its products come from 17 different countries, with about 5% to 6% of its U.S. revenue imported from China, none of its goods come from Canada, and “a small amount” of goods come from Mexico. “We follow the news as much as everyone else,” Chief Operating Officer Scott Lipeski said on the third-quarter earnings call. “We have a great sourcing team. We have great partners around the world, and if new tariffs go into effect at some point in the future, we will have a playbook.” Lululemon Chief Financial Officer Meghan Frank told a conference call on December 6 Analysts say about 3% of the company’s merchandise comes from China, less than half from Mexico and none from Canada. “If tariffs were imposed on goods imported into the United States from all countries, that would obviously have a more significant impact on our costs,” Frank said. Discount retailers Dollar General and Five Below are also on the list, as well as Dick’s Sporting Goods. Shares of Dollar General and Five Below have both fallen nearly 10% this year, with Dollar General hitting a 52-week low on Wednesday. Dollar stores are notoriously sensitive to tariffs because their profit margins are razor-thin. “We’ve been working with a number of our supplier partners and overseas sourcing teams to mitigate the impact of potential tariffs,” Five Below Chief Operating Officer Kenneth Bull said on the company’s third-quarter earnings call in early December. Pricing, he said, is The last lever a company can use. Construction and engineering equipment maker Caterpillar could also be at risk from Trump’s proposed tariffs, Wolf said. Caterpillar shares have been on a roll this year, rising 6.8% this week after Evercore ISI on Monday upgraded the stock to perform from underperform.
These are the stocks most affected by Trump’s tariffs, but they’re not priced in | Real Time Headlines
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