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Home / Business / Managers at Kohls, JC Penney, Home Depot speak out against tariffs

Managers at Kohls, JC Penney, Home Depot speak out against tariffs



This photo taken October 17, 2018 shows a worker who inspects shoes at a factory in Qingdao in China's eastern Shandong province.

STR | AFP | Getty Images

Kohls, JC Penney and Home Depot leaders were united in their messages for additional tax on imports from China, as they spoke with analysts during the conference after the Tuesday post conference.

Kohls, who saw his stock dive to a 52-week low after making the earnings estimates, is due to some of the reason for lower forecasts on a fall from the tariffs.

"These tariffs currently affect our Chinese goods in the home and accessory sector," said CFO Bruce Besanko to analysts on a post-service call. "China is not our biggest source of goods, but it is a big one. There is just over 20% of our goods. "

Kohl's CEO Michelle Gass called this a" very fluid situation right now ", adding that Kohl is" working very closely with our suppliers to ensure that we collectively have one. " strong plan. "

The White House has threatened to turn a second round of 25% tariffs of about $ 300 billion into Chinese goods that will include clothing and footwear. Accessories, including handbags, came into force earlier this month.

"In the guide, we have assumed that it will affect the gross margin, which is partly due to the fact that we have reduced the outlook for margin from what we previously had," Kohls CFO Besanko continued. "There are two components to it. One is this tariff increase. "

At the same time, the retail conference Penney ̵

1; which said net losses during the first quarter of last year, almost doubled – said that new tariffs could end up damaging their own brands, similar to what Mys CEO Jeff Last week, retailers have turned to private brands to try to increase their profitability, but the tariffs will dampen the benefits of this approach, as dealers will be forced to absorb the costs themselves.

"Looking ahead, expect we have a more meaningful impact on both our private and national brands if potential fourth transaction fee affects all imports from China, "says Penney CEO Jill Soltau analysts.

Tariffs have so far had a" minimal impact "on Penney's business , with the three rounds already in effect, Soltau said.

Home Improvement Dealer Home Depot, meanwhile, said that from tariffs of $ 200 billion of Chinese goods – which was increased to 20% from 10% – it's "about a billion dollars impact" on its business, but it's "affordable."

The last round of 25% tariffs are not included in the dealer's latest forecast. CFO Carol Tome said: "We are working through the impact of these charges and have therefore not included them in today's guidance."

Due to a disappointing earnings report, Kohls shares fell more than 11% on Tuesday, in line with their worst day since January 5, 2017, when the stock lost 19.02%. Penney shares were down 9%. Home Depot's stock fell less than 1%.

Chinese President Xi Jinping this week turned up his rhetoric by saying that China is on a "new Long March and we have to start again!" Although he did not mention the United States or the ongoing commercial war, the comments are interpreted as a clear sign. China will not cave to the Trump administration anytime soon.

Also this week, more than 170 shoe dealers, including Nike and Under Armor, sent a letter to President Donald Trump, saying 25% tariffs could cause some families to pay nearly 100% duty on shoes.

– CNBCs Maggie Fitzgerald and ] Gina Francolla contributed to this reporting.


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