Why Footwear Stocks Nike, On Holding, Deckers, and Boot Barn Were Tumbling Today

Core Viewpoint - The announcement of a 10% blanket tariff on global imports by President Trump has led to a significant decline in stock prices, particularly affecting the footwear and apparel sectors, which are heavily reliant on overseas manufacturing [1][2]. Industry Impact - The footwear and apparel sectors are facing price increases due to tariffs, which will pressure consumers and force companies to either pass on costs or absorb them, impacting profit margins [2]. - The S&P 500 index dropped by 5.1%, with footwear stocks experiencing severe declines, including Nike down 12%, Deckers down 15.8%, On Holdings down 14.9%, and Boot Barn down 15.1% [3]. Company-Specific Analysis - Nike's production is primarily in Vietnam (50%), Indonesia (27%), and China (18%), making it vulnerable to tariffs, which the company had previously warned would impact margins [6][7]. - Deckers, known for HOKA and UGG brands, has a manufacturing base in Asia and has already seen stock declines due to disappointing earnings guidance and weakening consumer sentiment [8]. - On Holdings, a Swiss sneaker company, derives 64% of its revenue from the Americas and relies on suppliers in Vietnam and Indonesia, making it susceptible to tariff impacts [9]. - Boot Barn, while not focused on athletic footwear, faces similar challenges due to its manufacturing in Mexico and China, and its ability to pivot to domestic products remains uncertain [10]. Future Outlook - The tariffs are expected to create a significant setback for the footwear sector, potentially delaying recovery for companies like Nike, although the sell-off may make valuations attractive [11]. - Despite short-term uncertainties, the long-term outlook for these companies remains positive due to strong brand recognition and ongoing consumer demand for sneakers [12].