Reliance (RS) Q2 2025 Earnings Call July 24, 2025 11:00 AM ET Company ParticipantsKimberly Orlando - Senior Managing DirectorKarla Lewis - President, CEO & DirectorStephen Koch - Executive VP & COOArthur Ajemyan - CFO & SVPConference Call ParticipantsMartin Englert - Senior Equity Research Analyst - Metals & MiningKatja Jancic - Metals & Mining AnalystMichael Harris - AnalystAlex Hacking - Equity Research Analyst - Metals & MiningOperatorGreetings and welcome to the Reliance Inc. Second Quarter twenty twent ...

SHELTON, Conn., July 23, 2025 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended June 30, 2025 were $54.0 million compared to $55.4 million in the second quarter of 2024, a decrease of 3%. Net sales for the six months ended June 30, 2025 were $100.0 million, compared to $100.4 million in the same period in 2024. Net income was $4.8 million, or $1.16 per diluted share, for the quarter ended June 30, 2025, compared to $4.5 million, or $1.09 pe ...

AkzoNobel cut its profit forecast for the year, as it factored the impact of currency headwinds into its guidance and warned of ongoing tariff uncertainty https://t.co/YRLTziXikD ...

Market Concerns & Tariff Impact - The primary concern revolves around the ultimate impact of tariff uncertainty on economic growth, both domestically and internationally [2][3][4] - Tariffs are projected to be significantly higher than last year's 25%, potentially reaching high single digits or even higher across the economy [3] - International trade may suffer as slower corporate earnings growth occurs due to decreased demand caused by tariffs [4] - The full impact of tariffs is yet to be felt, suggesting potential future headwinds for corporations [5] Economic Outlook & Inflation - The economy is currently holding up well, as evidenced by the labor market and inflation data [6][7] - Inflation numbers are expected to rise in the July and August readings, with acceleration later in the year [7] - The Federal Reserve is likely to remain on hold at the July meeting and potentially the following meeting due to uncertainty about inflation [7] Corporate Earnings - Second-quarter earnings are expected to be favorable, with anticipated growth of only 2% to 3% [8] - Third-quarter reports are expected to reveal more concerns from companies regarding coping with tariffs [8] Cryptocurrency - Crypto and Bitcoin are viewed as a play on inflation and the dollar, functioning as a currency [9] - They can serve as a hedge against inflation and dollar uncertainty, similar to gold, but lack cash flow [10] - Investing in companies like Coinbase is suggested, as they can profit regardless of Bitcoin's price fluctuations [11]

Investment Rating - The report maintains a "Buy" rating for Analog Devices (ADI), Allegro MicroSystems (ALGM), Microchip Technology (MCHP), and Texas Instruments (TXN), while Onsemi (ON) is rated as "Neutral" [10][11]. Core Insights - The semiconductor industry is experiencing strong near-term demand, but there are signs of demand pull-ins due to tariff-related concerns, which is a key investor worry [2][3]. - Distributor inventory levels have normalized, particularly for Microchip Technology, which has seen a significant reduction in inventory [4][8]. - Pricing across the sector remains generally stable, with ON experiencing notable pricing pressure as it attempts to defend market share [2][4]. Semiconductor Purchaser Survey - The quarterly B2B survey indicates a net increase in demand of +75%, with expectations for future demand remaining strong at +73% [15][17]. - Nearly half of the respondents are exploring alternative supply sources outside the US or China, which is seen as a positive for European analog suppliers [3][18]. - The percentage of respondents indicating their analog semiconductor inventory is above target has significantly decreased, suggesting a healthier demand environment [3][15]. Inventory Financial Reporting Deep Dive - The report highlights that Analog Devices and Microchip Technology have lean inventory levels, positioning them well for an upcycle, while ON continues to face headwinds with high inventory levels [7][8]. - MCHP has successfully executed a turnaround plan, reducing inventory and production significantly [8][10]. - The overall inventory days for major companies like ADI, MCHP, and TXN are being closely monitored, with MCHP showing the largest decline in inventory [4][15]. Pricing Trends - Pricing for true analog semiconductors has remained flat, while power analog pricing has slightly declined, particularly for ON [4][10]. - The report notes that 68% of respondents have reported price increases, with expectations for further increases strengthening to 62% [17][18]. Market Outlook - The semiconductor market is expected to see a recovery, with TXN maintaining elevated inventory levels in anticipation of a sharp upcycle [8][10]. - The report suggests that the channel will likely begin rebuilding inventory, flipping the delta between sell-in and sell-through [8][10]. - Overall, the demand picture is improving, with significant increases in net demand expectations across various sectors, particularly in data centers [32][46].

Summary of Conference Call Industry Overview - The conference call primarily discusses the impact of tariff changes on the Asian economy, with a focus on Japan and South Korea, as well as the broader implications for trade and capital expenditure (CapEx) in the region [1][2][5]. Key Points and Arguments Tariff Rates and Impacts - The weighted average tariff for the Asia region has increased from 4.8% in January 2025 to 23% currently, with projections suggesting it could rise to 27% if new tariffs are implemented on August 1 [1][2]. - Three categories of economies are identified regarding potential trade deals: 1. India is likely to finalize a deal before August 1. 2. Other economies may secure deals with tariffs above 10%, particularly in Korea and Japan. 3. ASEAN economies may receive a flat rate with minimal negotiations [2]. Trade Uncertainty and Economic Outlook - The uncertainty surrounding tariffs is affecting corporate CapEx decisions in the region, with investors indicating that the tariff issue is largely priced in [2][3]. - Historical context is provided, referencing the 2018 tariff situation where initial growth numbers remained stable despite tariff imposition, suggesting a potential lag in the impact of current tariffs [3][5]. - Key indicators to watch include monthly capital goods imports and U.S. import prices, which will help assess the burden of tariffs on Asian producers [4][5]. Japan's Economic Situation - Japan faces a 25% tariff rate, slightly higher than previous expectations, which poses downside risks to exports and CapEx if maintained [5][6]. - The upcoming upper house election on July 20 is a critical factor, with potential implications for trade negotiations and agricultural imports from the U.S. [6][8]. - The Japanese government is expected to maintain a cautious stance on agricultural imports, particularly rice, due to political pressures [6][8]. South Korea's Market Dynamics - South Korea is also affected by a 25% reciprocal tariff, with potential impacts on pharmaceuticals and semiconductors being more significant than the general tariff [9][10]. - The government is focused on market reforms and reducing real estate speculation, which could positively influence the equity market [9][10]. - Discussions around inheritance tax reforms and dividend tax changes are ongoing, with potential implications for corporate behavior and market dynamics [10][11]. Inflation and Monetary Policy - The region is expected to experience deflationary pressures due to tariff-induced slowdowns, contrasting with inflationary trends in the U.S. [16][17]. - Central banks in Asia, excluding China, are anticipated to implement rate cuts to support growth amid these challenges [16][17]. - Japan's Bank of Japan (BOJ) is unlikely to raise interest rates soon due to trade uncertainties impacting wage momentum and CapEx [8][18]. Conclusion - Overall, the conference highlights significant concerns regarding trade uncertainties and their potential impact on economic growth in Asia, particularly in Japan and South Korea. The focus remains on monitoring tariff developments, economic indicators, and policy responses from central banks [5][16][18].

Currency Market Analysis - The dollar's strength is uncertain due to tariff uncertainty [1] - The end of tariff uncertainty is needed to assess the dollar's viability [1]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Consumer sentiment toward the economy and household finances has stabilized amid ongoing tariff concerns, with inflation remaining the primary concern for consumers [1][7] - The report indicates a slight decline in consumer confidence regarding the economic outlook, with 37% expecting improvement and 47% anticipating deterioration, resulting in a NET score of -10% [7][61] - Concerns over tariffs remain elevated but stable, with 39% of consumers very concerned, down from 43% in April [7][14] - The spending outlook remains stable, with 32% of consumers planning to spend more in the next month, yielding a NET of +15% [19][84] - Travel intentions are strong, with approximately 60% of consumers planning to travel in the next six months, reflecting optimism in leisure travel [117] Consumer Sentiment - Inflation is the top concern for consumers at 57%, down from 59% last month, while political concerns have risen to 43% [8][37] - Geopolitical conflict concerns increased to 31% this month from 21% last month [7][8] - Low-income consumers are more worried about paying rent/mortgage and debts, while upper-income consumers focus on investment concerns [9][42] Macro Outlook - Consumer confidence in the U.S. economy is slightly down, with 37% expecting improvement and 47% expecting deterioration, leading to a NET score of -10% [61][71] - The outlook for household finances remains positive, with 43% expecting improvement and a NET score of +16% [64][70] Tariff Impact - 39% of consumers report being very concerned about tariffs, with 33% planning to cut back on spending in response [14][19] - The level of concern about tariffs varies significantly by political affiliation, with 63% of liberals very concerned compared to 23% of conservatives [14][50] Spending Intentions - The short-term spending outlook is stable, with 32% of consumers expecting to spend more next month, yielding a NET of +15% [84][88] - 30% of consumers reported making a major purchase in the past three months, with 58% planning a major purchase in the next three months [97][98] Travel Intentions - Approximately 60% of consumers plan to travel in the next six months, with visiting friends and family being the most common reason [117][119]

Core Viewpoint - The article discusses the impact of tariff uncertainties on alternative investments, particularly in emerging markets, and suggests a potential shift in investor focus towards developed markets in Asia and the MENA region due to these uncertainties [1][6]. Group 1: Investment Trends - Emerging markets can be categorized into two groups based on annual returns: one group with approximately 3% returns (Latin America, Central and Eastern Europe, CIS countries, and broader emerging markets) and another group with superior performance (developed markets in Asia and the MENA region) [6]. - Recent transactions highlight the operational environment and future investment potential in developed markets in Asia and the MENA region, such as the privatization of Skechers by 3G, which reflects concerns over potential new tax burdens on Chinese products [6]. - The acquisition of IO by OpenAI and the launch of the Stargate UAE project in the UAE indicate a growing trend in the AI sector, positioning the UAE as a leader in emerging industries and attracting investor interest [6]. Group 2: Future Outlook - Despite some stabilization in public markets since the introduction of initial tariff policies, investors continue to face significant uncertainties this year, necessitating agility and flexibility [7]. - The trend of production shifting from China to developed markets in Asia is expected to reshape the private equity landscape in the coming years, creating new investment opportunities in other emerging markets [7]. - The MENA region is poised to gain a more competitive position in the global investment landscape as a preferred area for AI companies [7].

Core Viewpoint - Gap is experiencing a resurgence with a reported 5% same-store sales growth for its fiscal first quarter of 2025, marking the sixth consecutive quarter of growth [1] Group 1: Company Performance - Gap closed approximately 2,000 stores and saw annual sales decline by about $3.5 billion from fiscal 2001 to 2021 [1] - In fiscal 2024, Gap's overall sales grew by 1%, primarily driven by Old Navy, which accounts for over half of Gap's revenue [4] - The company has improved its profitability, achieving growth on the highest gross margins in the past 20 years [4] Group 2: Leadership and Strategy - CEO Richard Dickson, who previously revived the Barbie brand at Mattel, took over in 2023 and hired fashion designer Zac Posen as creative director [2] - Posen has contributed to Gap's cultural relevance by dressing celebrities for high-profile events, although his main focus is on Old Navy [3] - Gap has undertaken significant restructuring, including store closures and layoffs, to clean up its balance sheet and set a foundation for future growth [5][6] Group 3: Challenges and Market Conditions - Despite beating Wall Street's earnings expectations, Gap's stock fell 15% due to concerns over U.S. tariff policies, which could cost the company between $100 million and $150 million [7] - Banana Republic and Athleta are not experiencing the same level of same-store sales growth as Gap and Old Navy, indicating ongoing challenges for these brands [6]