U.S. retail stocks set to bypass tariff woes but face aftershock risk GlobeInvestor
Shares of U.S. retail and consumer goods companies appear set to emerge largely unscathed from the trade dispute between the United States and China.
So far this year, the S&P 500 consumer discretionary index , which includes shares of retail and consumer goods companies as well as restaurants and leisure companies, has reflected optimism on trade as data have pointed to the overall strength of the U.S. economy. The index has risen 11.2 per cent, slightly ahead of the 10.6-per-cent rise for the S&P 500 as a whole.
Yet companies have made preparations to blunt the effects of current and possible future tariffs. In conference calls, companies including footwear maker Steven Madden Ltd, furniture retailer RH and Rubbermaid housewares maker Newell Brands have said they have offset cost increases by moving some manufacturing to other countries or negotiating discounts for their production in China.
The advance shipments could lead to an uptick in warehousing costs, cutting into companies’ profit margins, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation in Washington. In its earnings conference call last Wednesday, TJX Companies Inc hinted at the potential for an uptick in discounted goods, saying that disruptions resulting from changes in shipments and production could lead to opportunities for the company.
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