Trump Tariffs To Hurt Nike, Under Armour, VF: Are Ralph Lauren, Foot Locker Safer Bets?

Core Insights - Brands relying on the Asia-Pacific region for apparel production are seeking ways to mitigate the impact of President Trump's reciprocal tariff plan [1] - The average pre-mitigation headwinds to gross margin and EPS are 670 basis points and 65%, respectively [1] - Companies like Under Armour, VF Corp, and Nike are particularly vulnerable due to their low margin structures [2] Company-Specific Analysis - Under Armour, VF Corp, and Nike have little "cushion" to absorb incremental tariffs, which will significantly impact their EPS [2] - Ralph Lauren and Foot Locker are the least impacted brands, with a predicted 20-25% pre-mitigation headwind to EPS due to their strong international presence and high-margin P&L [2] - Ralph Lauren has a strong track record of raising prices for eight consecutive years, indicating confidence in managing pricing if necessary [3] - Foot Locker has minimal direct exposure to tariffs as they import sneakers, although they face indirect risks from suppliers [3] Manufacturing Insights - The analyst does not expect a shift towards in-sourcing manufacturing to the U.S. due to challenges in building capacity and finding skilled labor [4]