Footwear firms adjusting to tariffs by moving out of China, leading to lower profits.

From Yahoo Finance: 2025-07-01 17:21:00

Footwear firms are adjusting to higher tariffs by moving out of China, but this will lead to lower profits for the year. Uncertainty over tariffs and consumer spending has caused many shoe companies to withdraw guidance for the year. U.S. and China are in a 90-day tariff pause, with current tariffs at 30 percent.

Shoe companies are working to mitigate tariff impacts, with some pulling forward inventory receipts at pre-tariff prices. Caleres Inc. faces additional costs from moving goods and canceling orders related to tariffs. Crocs Inc. CEO states that daily tariff uncertainty makes planning difficult, but the company is managing pricing strategically.

Steve Madden Ltd. is swiftly adapting to mitigate tariffs and aiming to reduce goods produced in China. Apparel production in China will be less than 5 percent, down from 71 percent last year. BTIG analyst notes that lower tariffs provide some relief, but costs related to shifting production will still be felt.

Companies are bracing for price increases due to tariffs, with some already implementing selective price hikes. Companies like Nike Inc., Crocs, and Steve Madden are planning further price adjustments starting in July. Footwear companies are waiting to make final pricing decisions, with most expecting current pause rates to continue for the rest of 2025.



Read more at Yahoo Finance: But Did They Move Too Quickly?