(Reuters) - A host of U.S. consumer companies have warned that costs related to tariffs on goods imported from China would weigh on their results.
The United States increased tariffs on $200 billion worth of Chinese goods to 25% from 10% in May.
President Donald Trump has also threatened an additional round of tariffs on $300 billion worth of goods that would cover nearly everything imported from China to the United States.
BEST BUY CO INC: “The impact of tariffs at 25% (proposed to be enacted) will result in price increases and will be felt by U.S. consumers,” CEO Hubert Joly said.
HOME DEPOT INC: If the latest round of tariffs hold, it would increase annual cost of goods sold by $1 billion, on top of a $1 billion hit that the home improvement chain has taken from tariffs imposed in 2018.
The impact from new tariffs would still be manageable as it would make up less than 1% of total sales, said Edward Decker, executive vice president of merchandising.
J.C. PENNEY CO INC: “We do anticipate a more meaningful impact on both our private and national brands if the potential fourth tranche of tariffs does go into effect,” CEO Jill Soltau said.
KOHL’S CORP: Tariffs will primarily hit China-sourced merchandise in home and accessories business but apparel and footwear are not impacted at this point.
The department store chain said about 20% of its merchandise is sourced from China.
WALMART INC: “Higher tariffs will lead to higher prices for customers,” CFO Brett Biggs told Reuters in an interview last week. He said the company, known for lower prices, will try to minimize the effect of the levies on the company and its customers.
MACY’S INC: “The increase of the third tranche from 10% to 25% on May 10 does have some impact, particularly on our furniture business. However, the team anticipates that this can be mitigated,” CEO Jeffrey Gennette told investors on a conference call on Wednesday.
“It’s too early to comment on what we think that’s going to mean in terms of potential price increases and what categories are going to be more affected than others,” he said.
RALPH LAUREN CORP: “The tariffs enacted to date have a limited impact on our business, but our teams are prepared for multiple scenarios and have accelerated the diversification of our supply chain to mitigate the long-term impact of any potential tariff outcomes,” CFO Jane Nielsen told investors on a conference call last week.
CROCS INC: Footwear maker estimates an impact of about $5 million in 2019 assuming a 25% tariff takes effect. Co also expects the amount of U.S. product sourced from China to be below 10% for 2020, it now imports about 30%.
“Our current sourcing mix reflects our need to balance ramping up incremental supply to meet the growing demand for our product and continuing our multi-year effort to reduce our sourcing from China,” The company said in a statement.
DEL MONTE FOODS INC: “It’s not just tariffs. Transportation costs are up, labour costs are up,” CEO Greg Longstreet told Reuters at a conference in New York last week. “It’s an inflationary environment. A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.”
Del Monte has already raised prices on many products, including mandarin oranges that it imports from China, and will do so again with tariffs rising, he said.
Reporting by Nandita Bose, Siddarth Cavale, Rod Nickel, Aishwarya Venugopal and Uday Sampath Kumar; Editing by Anil D'Silva and Arun Koyyur