>>60619267>>60619259This guy ran off but I'll continue for young'ns that are here legitimately to learn as I once was.
So...the tarff is an additional cost TO NIKE because they pay the cost. Globocorp (NIKE) pays this tariff, not you.
Without room to move their prices up AND/OR maintain a relative volume at a higher price their margin goes down because they can't make up the cost on a relative basis.
Nike is especially susceptible to this because of their markering/promotion based price points that they've kept very high for decades.
So, their margin shrinks. Thus their profitability on a relative return basis. So investors go elsewhere as they have been doing.
It doesn't mean Nike isn't still profitable. It means the are substantially less profitable and investors dump stocks and move to where they think a better risk/return ratio exists.
It doesn't hurt everyone the same. But it hurts NIKE, APPL, and other over priced brands that have maxxed out their margins for decades.
Another example. American Spirits has been growing a lot in the last decades, even at their premium price. They cost like twice as much.
But now...given that they grow all tobacco in the USA, they just received a massive relative benefit equal to the tariffs being paid on their imported tobacco (which is not all their tobacco by any means).
However, now American Spirits competitor has a cost that America Spirit does not.