Retailers have been responding to the recent onslaught of tariff changes by the Trump administration.
C-suite members on recent earnings calls have clarified their company’s operations and answered inquiries about their approach to navigating the current environment.
While talking with analysts on Feb. 20, Walmart’s response to questions regarding tariffs was relaxed, even nonchalant, with CEO Doug McMillon stating they’ve managed tariffs for years. But, by March 6, Bloomberg reported that the big-box retailer was pushing suppliers for price cuts to mitigate their impact.
What retailers are saying regarding the impact of tariffs runs the gamut. A number of off-pricers aren’t concerned due to their sourcing models. Other companies are stating that consumers should expect prices to go up. A large portion of retail leaders say they are leaning on positive relationships with vendors or have already begun to diversify their supply chains. Many executives have stated a variation of “we’ve been through this before,” referring to tariffs enacted during Donald Trump’s first presidency.
From what retailers are saying about tariff expectations, specific action plans, expected outcomes and even positive commentary, here are 25 retail leaders responding to changing tariff conditions.
Retail leaders on tariff expectations and preparation
“With a sourcing organization that’s decades old, our team has a lot of experience in navigating this type of volatility. They’re monitoring the situation carefully and we expect to successfully navigate through any changes, just like we have in the past. However, given near-term uncertainty, we’ll be looking to maintain a larger-than-normal cushion on the balance sheet.”
“When we think about tariffs and tariff implications, we only start with the impact on consumers and the families we serve and how, in an environment like this, we continue to make sure we're providing the affordability and value they're looking for.”
“Tariffs are something we've managed for many years, we'll just continue to manage that. … We can't predict what will happen in the future, but we can manage it really well. And we're wired to try and save people money. So that will be our ultimate goal.”
Macy’s Chief Operating Officer and Chief Financial Officer Adrian Mitchell
“We have worked hard to create a flexible supply chain that allows us to mitigate the impact from potential disruptions to global trade and tariff activity.”
American Eagle Outfitters CEO Jay Schottenstein
“You have to remember that eight years ago, we went through this before, and everything settled down. So we just have to be calm and on course. We're not going to be jumping all over the place until we know exactly what the story is.”
Retail leaders on tariff navigation plans
“We're shortening lead times. Discretionary categories are going to come inherently with more volatility than food staples, but when we can pull 20% of our lead times out of a category like apparel, and that's some of the thinking that's gone into our lead times that are powering the receipts that we take in through 2025 in that category, we'd expect that to help us reduce that volatility over time.”
Target Chief Commercial Officer Rick Gomez
“We have been pulling, moving things out of China to other places around the world, looking at going across Asia as well as western hemisphere — Guatemala, Honduras, so we have a much more diverse set of countries from which we produce. I think that's just going to give us more flexibility and help us be more agile.”
“As the tariffs have been announced, we have seen some disruption in the border crossings from Mexico into the United States as the Mexican government is trying to make sure that they are compliant with whatever the rules of the moment are about the tariffs. And our Pop Yourself is built in Mexico. And so we have seen delays in the trucks getting across to the extent that we have started having to turn expedited shipping on and off to protect the consumer experience on that. And it’s a short-term thing, but it’s the right thing for the customer experience long-term and a product that is as new as Pop Yourself is, and so that’s having a bit of an impact for us as well.”
“About a third of our sales in the U.S. are imported from other countries and less than half of those are items coming from China, Mexico and Canada. In uncertain times, our members have historically placed even greater importance on the value of high-quality items at great prices and our teams will continue to rise to this challenge by leveraging our global buying power, strong supplier relationships and innovation.”
“While we don't know the exact exposure our brand partners have upstream, only about 1% of our shipments over the last 12 months were direct imports. And so, our exposure is relatively, limited. … Similar to how we successfully navigated in the 2018, 2019 period, our teams are staying very close to the evolving situations and we're continuing to navigate it … both for our business as well as with our brand partners.”
Build-A-Bear CFO Voin Todorovic
“We are going to be pulling forward our inventory purchases, especially of our core product to help mitigate some of those potential impacts. … I firmly believe that over time we are going to be working with our partners, with our vendors and to become more efficient to help mitigate some of those things. And the last resort is really to continue to raise prices. But again, we need to have a little bit more stability, understand where these things may land so that we can really manage our business.”
“Right now, knock on the woods, should the world be OK and should your friend not install tariffs in a way that it will create a lot of noise — I think we are in very, very good shape to be honest. But again, we don't know.”
Retail leaders on forecasting tariff impact
“Our full-year guidance will reflect sort of a wide range of potential scenarios and uncertainty that we see in the marketplace right now, so that certainly covers tariffs and certain things.”
“International trade is critically important to our business and industry. The consumer electronics supply chain is highly global, technical and complex. China and Mexico remain the No. 1 and No. 2 sources for products we sell, respectively. While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”
Abercrombie & Fitch Co. CFO Robert Ball
“For tariffs, our outlook includes U.S. tariffs on China, Canada and Mexico currently in effect. We expect a 2025 impact of around $5 million.”
“This is a rapidly evolving situation and it's on consumers' minds. We're watching it closely of course how this would impact overall cost and pricing for consumers across multiple categories could have impact. I would say, first of all, the industry has done some good work over the years to diversify portfolio outside of China. So that's an advantage. And also I would say that our direct exposure is pretty moderate to small.”
Victoria’s Secret CFO Scott Sekella
“In the back half of the year, right now though, is where we've got the impact of the tariffs plan that we called out. So we've got a 10% assumed on China for the balance of the year, and that's going to be worth about $10 million to $20 million.”
“Our first-quarter inventories are in good shape. There'll be no impact from the pending tariffs. As we look at the remainder of the year, we're taking a case-by-case basis and trying to react in real time as we learn more.”
“Our confidence in the second-half growth is based on things we can control, which include: first, mitigating the impact of tariffs through all available strategies, including renegotiating factory costs, accelerating our shift in production to other sourcing countries and implementing pricing adjustments.”
“I think we are primarily sourced out of China today. Our sourcing team is actively working with vendors to mitigate the impact of the tariffs we've seen to date. …We're actively working with our vendors, looking at moving sourcing to different locations, but we feel good about the guidance and feel good that we can offset the impact of tariffs.”
Gap Inc. CFO Katrina O'Connell
“Specific to tariffs, in fiscal 2024, we sourced less than 10% of our product from China, and less than 1% of our product from Canada and Mexico combined. Our fiscal 2025 outlook is informed by what we know today regarding tariff policy and includes any expected margin with impact, albeit small, from current actions related to those countries.”
Retail leaders who are optimistic
Burlington Stores CEO Michael O'Sullivan
“Right now things are very dynamic. It feels like there's new developments every day, literally every day on tariffs. That's creating a lot of uncertainty. It's likely that that uncertainty is going to drive disruption in supply chains across retail as merchandise that was ordered months ago starts to arrive and is hit with a tariff.
And that disruption, I would say, is likely to create a buying opportunity for off-price. So, off-price availability is good right now and I think the chances are it's going to get better in the months ahead.”
“In this environment, secondhand could become more attractive for shoppers seeking out affordable high-quality clothing. ... Fifty-nine percent of consumers say if new government policies around tariffs and trade make apparel more expensive, they will seek more affordable options like secondhand.”
“I think the other part of the tariff equation is if new apparel — companies that sell new apparel have increased costs from products that they're making in China or things that they're bringing in from Mexico, anything that increased the cost of new apparel is likely also to provide some modest tailwind to secondhand goods because we don't have exposure to bringing in products from overseas and so — everything that we process. And so ThredUp is all here in the U.S. So I think in both areas tariffs can be a net positive for our business.”
“A few years ago with extreme inflation ... we navigated right through that, just as we will on this.”
“As far as the tariffs go, we feel that we have a very good long-term relationships with our vendors and working with them to do our best to manage costs there. We feel confident that with that at this time, we will be able to work through that without much harm.”
“Here at BJ's, we believe our purpose is to take care of the families that depend on us. We take that honor and responsibility seriously. We work very hard every day to present the best values to our members. And so tariffs and the resulting rise in prices run counter to our purpose and may disrupt consumer spending and the greater economy in general. After all, consumers have tolerated a lot in the last few years.
With that said, periods of rising prices and supply chain disruption have often been good for our company. When consumer wallets are stretched, most consumers search for value, they come to our channel and they come to BJ's. We also have lesser exposure to tariffs than many retailers out there.”
