American shoppers are anxious about tariffs. The businesses that serve them are, too, although not all of them are bracing for the worst.

Shopper sentiment in February took the biggest monthly hit seen in three years, in keeping with The Convention Board’s Shopper Confidence survey, which confirmed that People are involved tariffs will spur inflation.

Companies are exploring methods to shield their income via provide chain adjustments and value will increase, executives mentioned throughout latest convention calls. Whereas some consumer-focused firms fear tariffs will damage enterprise, others are assured they will deal with—and even reap rewards from—larger import prices.

President Donald Trump said this week that he plans to impose a 25% tariff on merchandise from Mexico and Canada, starting Tuesday. He additionally mentioned the U.S. would increase a tariff on items from China to twenty% and has not too long ago talked about including tariffs to objects from different areas, together with the European Union.

Tariffs Would Result in Value Hikes at Some Firms

Many firms mentioned they’d increase a minimum of some costs if tariffs have been enacted—from the beauty firm Sally Magnificence (SBH) to Hamilton Seashore Manufacturers (HBB), which sells small family home equipment. 

Quite a lot of companies mentioned they labored to blunt the potential blow by diversifying their provide chains. Steve Madden (SHOO) diminished sourcing from China by about 20% because the final quarter, CEO Edward Rosenfeld mentioned. However selective value will increase will nonetheless be needed, he mentioned.

Increased costs might not dramatically alter the outlook for some firms. Birkenstock (BIRK), which finishes its shoe meeting in Germany, has been capable of increase costs with out consequence up to now, CFO Ivica Krolo mentioned on an earnings convention name final month.

“The excellent news right here [is] that we’ve got, traditionally, [had] the power to take pricing motion globally that offsets these inflationary pressures, together with tariffs, with none influence on our enterprise,” Krolo mentioned, in keeping with a transcript made accessible by AlphaSense.

‘We have Been By way of This Earlier than’

Some massive firms see their measurement as a bonus in navigating tariffs. Coca-Cola (KO) may rely extra on plastic bottles than cans, CEO James Quincey mentioned on an earnings convention name in February. He added that even when the corporate pays extra for aluminum, it’s “not going to transform a multibillion greenback U.S. enterprise.”

Walmart (WMT) is aware of methods to discover worth for shoppers amid tariffs, executives mentioned. So does Dwelling Depot (HD), government vp of merchandising Billy Bastek mentioned on an earnings name this week.

“We’ve been via this earlier than,” Bastek mentioned, in keeping with a transcript made accessible by AlphaSense. «With our scale, we really feel that we’re as effectively or higher positioned than anybody within the market.»

Some Firms See Probability to Profit

A number of firms mentioned they could even profit from tariffs.

Roku (ROKU) would not anticipate tariffs to influence its product margins. However they might increase the price of “larger finish» TVs, prompting individuals to maneuver to cheaper choices and driving up demand for Roku, mentioned Mustafa Ozgen, president of gadgets, merchandise and expertise.

Newell Manufacturers (NWL), which sells Yankee candles, believes tariffs current each headwinds and potential advantages. The corporate has ramped up its manufacturing capability within the U.S., CEO Christopher Peterson mentioned. This provides Newell a bonus over rivals—and potential shoppers—he mentioned on an earnings name in February.

The corporate has been informing retailers it may well shortly add manufacturing capability within the U.S. «on a primary come, first serve foundation,» Peterson mentioned.