(Reuters) – The first half of 2019 was expected to be a boon for U.S. retailers, buoyed by solid consumer sentiment at home and expansion in China – the market many of them have targeted for the future.
Instead, new tariffs President Donald Trump slapped on some Chinese imports last month and fears that more could come in the escalating trade conflict between Washington and Beijing, had many investors bailing from the sector.
The tensions have hovered as a potential risk for markets for more than two years. But what really unsettled investors in the latest round of earnings calls was retailers admitting that tariffs were starting to bite and how little they had to say on how they could soften the blow.
Best Buy Co Inc and Walmart warned higher duties would put pressure on prices for U.S. consumers, while Macy’s Inc and J.C. Penney Company Inc said their businesses would suffer if tariffs were extended to include apparel and footwear.
Kohl’s Corp said trade tensions were one of the reasons for a cut in its profit outlook and called the situation “fluid.”
“We have been watching this tariff story play out,” said Tony Scherrer, director of research and a portfolio manager at Smead Capital Management. “There doesn’t seem to be in the immediate term (any sign) of things getting any better.”
[To read the original article, click here]