
Footwear investors were more than ready to jump on the good news that the Trump administration has hit pause on its threat of additional tariffs on Chinese footwear, leading to immediate gains for several brands and retailers.
There were few winners bigger than Crocs, which announced earlier in June that it cutting its Chinese production considerably if current trade conditions held. The brand, which no longer manufactures its product in-house, may have suffered under a higher tariff regime. However, after the president tweeted Sunday night that a deal could be made, Crocs stock rose by 4.3 percent as soon as the market opened on Monday morning.
Big players, like Nike and Adidas, have largely already made significant efforts to limit their exposure to tariffs by diversifying their sourcing practices away from China, but most still enjoyed an affectionate bump from investors Monday morning. Nike stock rose 2.6 percent to $86.07 at the peak of early trading while Adidas nudged up 1.1 percent to a high of $155.88. Under Armour joined in as well after a volatile month, gaining 1.8 percent for a 46-cent gain before falling 22 cents into the negative at publication time.
Footwear brand groups like Deckers Outdoor Corporation, Wolverine Worldwide and VF Corp., performed well at the outset of the day Monday, although their gains were quickly offset when the market leveled off in the early afternoon. Wolverine rose 2.1 percent for a 57 cent gain, VF Corp. jumped 1.5 percent for a gain of $1.31, and Deckers pulled in $3.33 to rise 1.4 percent.
Retailers weren’t left out from the early morning scramble, Foot Locker stock increased $1.22 in stock value, up 2.9 percent, compared to Genesco, the parent company behind Journeys, which leapt up 3.3 percent to add $1.43 to its stock valuation.
Overall, the Dow Jones Industrial Average rose by more than 200 points for a record high as soon as investors had an opportunity to pounce on newly optimistic apparel stocks. However, after threatening to turn in one of its best days recently, that initial enthusiasm has subsided to a more modest 37.88-point gain at publication time, up 0.15 percent.
It has been an uncertain year for footwear companies after rumors began circulating in the spring of 2018 that increased tariffs on Chinese goods could be on the table. Already, footwear-related goods face an average duty of around 11 percent, although some products can face tariffs as high as 67.5 percent.
Whether or not the threat of higher duties is actually realized, FDRA president Matt Priest told Sourcing Journal the relationship between the footwear industry, the Trump administration and China has been “forever changed.”