2025-05-12 03:14Summary of Key Points from the Conference Call Industry and Companies Involved - Industry: Lifestyle & Growth Platforms - Companies Mentioned: - SharkNinja (SN) - YETI Holdings (YETI) - Acushnet (GOLF) - Revolve (RVLV) Core Insights and Arguments - Tariff Impact: - In Q1, tariffs led to a 60 basis points decline in adjusted gross margin (GM) to 50.2% for the companies involved, with potential gross costs amounting to hundreds of millions [7] - Estimated gross cost of $100 million due to a 145% tariff on China-sourced products and a 10% tariff on goods from other countries, resulting in a net 450 basis points decline in GM [7] - Tariffs expected to indirectly reduce top-line growth by 300 basis points due to a softer consumer environment and supply chain disruptions [7] - Mitigation Strategies: - Companies are diversifying supply chains, aiming for 90% of US volume to be sourced outside of China by Q2, leveraging suppliers in Southeast Asia and building strategic inventory in the US [7] - Cost reductions through supplier concessions, value engineering opportunities (over 1500 identified), selective pricing, and operational expense optimization [7] - Acushnet plans to offset over 50% of the gross tariff impact this year, with further relief expected in FY26 [7] - Revolve is engaging in cost-sharing discussions with manufacturing partners and diversifying sources outside of China, although this is a long-term strategy [7] Additional Important Insights - Company Valuations and Price Targets: - Acushnet Holdings Corp.: Price target of $75 based on ~13x 2026E EV/EBITDA; risks include slowing industry growth and adverse weather [8] - Revolve Group, Inc.: Price target of $24 based on ~30x FY26 P/E; downside risks include economic weakness and competition [9] - SharkNinja Inc.: Price target of $175 based on ~19x FY26E EV/EBITDA; risks include supply chain headwinds and increased competition [10] - YETI Holdings, Inc.: Price target of $53 based on ~18x FY26E EPS; risks include competition and economic weakness [11] - Inventory Exposure: - Approximately 22% of Revolve's FY24 inventory purchases are directly exposed to tariffs, with management anticipating a GM reduction of 240 basis points due to tariffs and shifts in consumer demand [7] - Strategic Focus: - Companies are focusing on managing inventory levels tightly, reducing safety stocks, and pausing non-critical capital expenditures to preserve cash flow and minimize risk [7] This summary encapsulates the key points discussed in the conference call, highlighting the impact of tariffs, mitigation strategies, company valuations, and strategic focuses of the involved companies.