Levi's execs on Trump tariffs: We can't estimate the impact yet for investors
Levi's (LEVI) execs just gave a market nervous over bruising tariffs a taste of what's to come for earnings season.
A heavy dose confusion, with a lack of clear cut guidance for investors in search of badly needed clarity.
"Given that the situation is fluid and unprecedented, the impacts are uncertain. We are in the process of scenario planning and determining different mitigation strategies. We recognize this is a quickly evolving macro situation and we have to see where the dust settles to give you the guidance that is going to be as helpful to you as possible,' Levi's long-time CFO Harmit Singh said on a late Monday earnings call.
'For now, our full-year outlook remains unchanged and includes no impact from the proposed tariffs."
Levi's CEO Michelle Gass said the company has assembled an internal "task force" to determine the tariff impact and proper responses, such as price increases.
The company relies on 130 facilities in China and 50 in Vietnam — two countries Trump earmarked for large tariffs — to produces its various apparel offerings.
At least for now, the market thinks Levi's may be able to overcome some tariff headwinds.
Shares rallied more than 8% in after-hours trading on the unchanged profit outlook and a 10 cent quarterly earnings beat. Execs said on the call that demand remained solid through the end of March.
Levi's shares were among the top trending tickers on the Yahoo Finance platform.
But whether the post earnings rally can be sustained is up in the air.
President Trump uncorked a baseline tariff rate of 10% that went into effect on Apr. 5.
A higher tariff rate will start on Apr. 9 for about 60 countries that the administration considers to be the worst trade offenders.
Some of those nations are important sourcing and business regions for large US retailers in Levi's and Nike (NKE). China, for example, will see reciprocal tariffs of 34%. Vietnam clocks in at 46%.
The reciprocal tariffs are on top of existing duties, such as the 20% Trump imposed on China earlier, bringing the total rate on the country to 54%.
China has retaliated with a 34% tariff on American goods. Trump fired back on Monday, threatening an additional 50% tariff on China if the country doesn't remove its US tariffs.
"The supply chain for lifestyle brands is entrenched in Asia and not easily relocated. If seen through, incremental expense from these tariffs is a significant challenge to profitability for our coverage universe. Until visibility improves, we expect investors show very little appetite for investment in our coverage universe," Stifel apparel stock analyst Jim Duffy said in a recent note.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Click here for all of the latest retail stock news and events to better inform your investing strategy
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
39 minutes ago
- Yahoo
Worried about a stock market crash? The Big Short's Michael Burry was…
The UK and US stock markets are once again approaching all-time highs. Markets have truly rebounded since Trump shocked the world with his trade policy. However, this rebound concerns me. These stock markets are trading near all-time highs despite a huge increase in the average effective US tariff, despite worsening geopolitical tensions, and despite sovereign debt concerns. Personally, I'm not sure investors have truly factored in the full impact of recent tariff increases on corporate earnings. Over the past year, average effective tariff rates have risen significantly, reaching levels not seen since the late 1930s. Under the Biden Administration, the average effective tariff rate was around 2.5%-2.7%. In May, that figure had risen to almost 20%. These tariffs have introduced new costs for businesses that rely on international supply chains. However, I just don't believe we've really seen the impact of them yet. After all, 'Liberation Day' took place at the beginning of Q2, and we're still in Q2. The full earnings impact of these tariffs is expected to become more visible in the second half of 2025, as companies report on their financial results and adjust to the new cost structures. Michael Burry, best known for predicting and profiting from the 2008 subprime mortgage crisis — a story retold in The Big Short — sold nearly all positions at Scion Asset Management in the quarter ending 31 March 2025. This move, alongside concentrated bearish bets through put options — bets that a stock will go down — on major tech and Chinese stocks, seemingly reflected his conviction that the market was sinking. Burry's only notable long was Estée Lauder, suggesting a defensive stance. However, 13F filings only show holdings as of 31 March, so his actions after that date remain unknown. As we know, the market slumped in early April but has since recovered. Within this context, I'm increasing looking at defensive options. I could look at farming stocks like Pilgrim's Pride, for example, which could outperform in a downturn. However, one option closer to home is the National Grid (LSE:NG.). The company recently reported strong financial results for the fiscal year 2025, with statutory and underlying pre-tax profit up 20%. The company is also investing heavily in its infrastructure, with a capital expenditure plan of £10bn aimed at modernising the energy grid and supporting the transition to renewable energy sources. This investment is part of a broader strategy to expand its regulated asset base, which is expected to grow by around 10% annually over the next few years. It does, however, introduce additional execution risk. Net debt is already £47.5bn — very sizeable. It's also not particularly cheap on face value. The stock trades at 14 times forward earnings, which may be a little demanding when we consider debt is on par with market capitalisation. Nonetheless, the forward dividend looks strong at 4.6%. The National Grid is not a stock I'd normally watch, but given my concerns about the potential overheating of the market, it's something I'm adding to my watchlist. It may be worth considering. The post Worried about a stock market crash? The Big Short's Michael Burry was… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has no position in any of the shares mentioned. The Motley Fool UK has recommended National Grid Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Hamilton Spectator
an hour ago
- Hamilton Spectator
As his trade war faces legal pushback, Trump has other tariff tools he could deploy
WASHINGTON - U.S. President Donald Trump's tariffs are facing legal headwinds for the first time — but he has other tools he could deploy in his quest to realign global trade. A federal appeals court is still deciding whether there will be a stay on Trump's universal tariffs enacted through the International Emergency Economic Powers Act of 1977, usually referred to by the acronym IEEPA. The U.S. Court of International Trade ruled the duties were unlawful last month. IEEPA is a national security statute that gives the U.S. president authority to control economic transactions after declaring an emergency. It had never previously been used for tariffs. Trump declared emergencies at the United States' northern and southern borders linked to the flow of fentanyl and migrants in order to hit Canada and Mexico with economywide tariffs. He later declared an emergency over trade deficits to impose his retaliatory 'Liberation Day' duties on most nations. The trade court found Trump exceeded presidential powers by using IEEPA to broadly implement the duties. The Trump administration quickly appealed the decision and the White House said it would take the case to the Supreme Court. Following the ruling, White House Economic Council Director Kevin Hassett said he was confident the court ultimately would decide in Trump's favour. Hassett said that if it doesn't, 'we'll have other alternatives that we can pursue as well to make sure that we make American trade fair again.' While the U.S. Constitution gives power over taxes and tariffs to Congress, Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said it passed laws over the last century that allow the president some control in certain situations. Trump is now looking to use those laws — some of them for the first time. The president may be considering Section 338 of the Tariff Act of 1930. It allows a president to hit countries with tariffs of up to 50 per cent if the country 'is treating products of the United States disfavourably, compared to products of another foreign country,' said Peisch, a partner at Wiley Rein in Washington, D.C. Section 338 has never been used by a president before and Peisch said it might be difficult for the administration to make a case for it. Trump also might look to Section 301 of the Trade Act of 1974, which allows a president to take trade actions if an investigation finds a trading partner's policies are unreasonable and discriminatory. Trump used this law during his first administration to impose tariffs on some Chinese imports and European Union goods. But Section 301 requires country-by-country investigations of trade policy before a tariff can be imposed — investigations that could take weeks or months and would include a period for public comment. That certainly would slow down Trump's efforts to target the world with tariffs. If the president is looking for speed, Peisch said, he might try to use Section 122 of the Trade Act of 1974 — another law that has never before been used. Section 122 allows a president to implement tariffs of up to 15 per cent to address large and serious United States balance-of-payments deficits. But those duties can only stay in place for a maximum of 150 days before they need Congressional approval to continue. That reduces Trump's leverage if his goal is to pressure countries to sign trade deals — those countries could simply decide to wait the president out. Trump also has said tariffs will help pay down the deficit; the short-term Section 122 power is unlikely to work as a long-term revenue strategy. Ultimately, Peisch said, none of the replacement statutes could easily build Trump's universal tariff wall around the United States. 'Nothing is a great fit without a lot of work,' she said. 'So I think it's potentially going to be a challenge.' This report by The Canadian Press was first published June 7, 2025.
Miami Herald
an hour ago
- Miami Herald
US close to high-speed rail breakthrough
When the great and the good of the American high speed rail industry gathered in Washington, D.C. over May 13-15 for the U.S. High Speed Rail Association's (USHSR) 2025 annual conference, there was tremendous excitement tinged with anxiety. Several attendees told Newsweek they believe the U.S. could be on the verge of a high-speed rail breakthrough, setting the stage for the kind of comprehensive national system enjoyed in the likes of China, Japan and Western Europe. Ray LaHood, a Republican who served as Transportation Secretary under President Obama from 2009 to 2013, said if one of the two high-speed rail lines currently under construction is completed, it will prove 'wildly popular' and boost support for high-speed rail across the nation. Other insiders agreed, but argued permitting reform and more explicit federal support will be needed first. There has been concern over the Trump administration's attitude toward high-speed rail. The conference took place one month after Transportation Secretary Sean P. Duffy announced $63.9 million in funding for a proposed Dallas to Houston route had been scrapped, and amid rumors that the California High Speed Rail line under construction between Los Angeles and San Francisco could lose federal support. This week, Duffy said there is 'no viable path' to complete California High Speed Rail on time or on budget and warned the federal government could pull billions in funding. State of U.S. high-speed rail At present there aren't any high-speed rail networks — defined by the International Union of Railways (UIC) as operating at a minimum of 250 kilometers per hour (155 miles per hour) along specially built tracks — that are operational in the U.S. This compares unfavorably with the likes of Spain, Japan and France, which have around 2,460 miles, 1,830 miles and 1,740 miles of track respectively currently in use. Most impressively, China, the chief geopolitical rival of the U.S., has gone from having virtually no high-speed rail lines to nearly 30,000 miles over the past couple of decades. Construction is currently underway on two high-speed rail lines in the U.S.-Brightline West, which will connect Las Vegas to Southern California, and California High Speed Rail between Los Angeles and San Francisco. A range of other projects have been proposed around the country, including plans to link Boston, New York and Washington, D.C. in the Northeast; Dallas, Houston and Fort Worth in Texas; and Chicago to East St. Louis in Illinois. Obstacles When asked why the U.S. had failed to build a high-speed network comparable to other advanced economies, industry experts told Newsweek there are major issues with permitting, financing and cross-party political support. California High Speed Rail has sparked particular controversy, with its cost ballooning from $34 billion to over $128 billion, while the completion date has been pushed back. Terry Hynes, an attorney specializing in rail infrastructure projects, argued planning issues in particular have bottled up capital investment. He is currently part of a team investigating how the permitting process could be sped up for USHSR. Addressing Newsweek, he said: 'I've been in the business 46 years, making railroads, and I've been frustrated as hell representing the high-speed just takes forever. And there's private money that could be brought in. Wall Street's got a lot of money looking for infrastructure investments. 'This is a wonderful infrastructure investment, the trouble is they see those permitting times. Eight years for environmental review, then you build for four years and in year 13 you're finally going to see some money. Nobody's going to invest in that.' Hynes added: 'The biggest issue to my mind is this permitting issue. The review period takes so long, the cost goes up and the more expensive it is for people doing a cost-benefit analysis, the analyses looks less beneficial.' Brandon Wheeler, a senior program manager at the North Central Texas Council of Governments, a local government-based voluntary association, said a lack of national leadership has undermined high-speed rail construction across the U.S. Speaking to Newsweek, he said: 'We don't have a national single point of leadership on that single point of leadership it really is a little bit hopscotch and we're making the best we can of it. 'Until there is, like the interstate highway system, there's a national vision to create and you have a vision around the ability to move military and goods and those kinds of things. Until our airports get bad enough, until our roads get bad enough, until people have this massive outcry and we're able to concentrate them on something, we're going to have to find what that single vision is to rally around or we will fall behind the rest of the world.' LaHood agreed, saying: 'I think the success of these projects in Europe and Asia is largely due to the national government making investments but then encouraging the private sector. Once the national government makes a commitment, it's easier for the private sector then — they know it's going to be a stable project, they know their investment is going to be good.' If you build it they will come In 2023, Brightline, the first privately built rail line in the U.S. to open in nearly a century, began operations between Miami and Orlando in Florida and has since seen passenger numbers surge. While Brightline runs below the high-speed standard, LaHood said it showed Americans are ready to embrace new rail networks, and argued one successful project in the U.S. could turbocharge the whole industry. 'If you look at the Brightline project in is wildly popular,' he said. 'They're putting more and more trains on that track every day because people like the idea that they don't have to get on the I95 and they don't have to travel on highways that are crowded with big trucks and cars... 'If you build it they will come, if you build it it will be successful and I think that will be the case with Brightline West, Las Vegas to L.A., and I think it will be true San Francisco to L.A. I think they will be wildly popular. I really believe at this point if you build it they will come and the proof of that is Europe and Asia-their trains are wildly popular.' Speaking to Newsweek, Portland Mayor Keith Wilson, who is advocating for a 'Cascadia' high-speed rail line linking the city to Seattle in Washington and Vancouver in British Columbia, said: 'Our system continues to be compacted and stagnant. 'The great cities from around the world are all tending to go towards high-speed rail and we need an opportunity to unlock our economic renaissance, which is what's missing in our country right now, and high-speed rail would move us forward and get us completing again with the world.' Trust fund A number of industry insiders told Newsweek the formation of a federal government trust fund could provide the financial muscle for a major U.S. high-speed rail expansion. Asked what one development would most speed up U.S. high-speed rail, Jim Derwinski, executive director of Chicago rail system Metra, replied: 'A trust fund so it's national, it's bipartisan so it doesn't change from administration to administration and it can be supported through the states as a national effort. 'If you're going to build something, to compare it to Europe and Asia right now, it's got to have a national campaign right now.' Arthur Sohikian is executive director of High Desert Corridor, a proposed high-speed rail line that would link Brightline West to the California High Speed Rail line. He expressed a similar view to Derwinski, telling Newsweek: 'We have to energize the public to make that been trying to get a trust fund for rail since I started my career, it seems. 'For whatever reason why the politicians won't grab onto that and won't do that, especially when you realize the Highway Trust Fund keeps diminishing as cars get more efficient, we're paying less in gas taxes, that fund is have to invest in this infrastructure as a nation, and until that happens, seriously, we're all going to be trying to do our little pieces.' The U.S. High Speed Rail Association paid travel and hotel expenses for Newsweek reporter James Bickerton to attend its 2025 annual conference. Related Articles Portland Plan To Eliminate Homelessness 'Right On Schedule'Texas High Speed Rail Plan Issued Blow From Trump AdministrationTexas Bill Seeks To Thwart High-Speed RailPossible Northwest High-Speed Rail Route Gets $50 Million Boost 2025 NEWSWEEK DIGITAL LLC.
