Dick’s Sporting Goods CFO Says The Chain Has a Playbook For Handling Trump’s Tariffs
Dick’s Sporting Goods is the latest retailer to publicly sound off about its strategy to deal with potential new tariffs.
In a Tuesday call with analysts discussing the company’s third quarter results, Dick’s chief financial officer Navdeep Gupta addressed how the company will approach the impact of potential new tariffs on imports to the U.S. Just this week, president-elect Donald Trump said he plans to impose a 25 percent tax on all products entering the U.S. from Canada and Mexico, plus an additional 10 percent tariff on imports from China.
Gupta said that while details like timing and impacted categories are still unknown, Dick’s has navigated several rounds of tariff changes during the prior Trump administration. For that reason, he remained optimistic about the company’s ability to manage through the changes once more.
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“[From a] vertical brands perspective, we have a very small — actually very negligible — amount of exposure because we have diversified our supply chain, both from China and there’s not much of an exposure even if you look into Mexico or Canada,” Gupta said. “So we feel we are well positioned for that.”
When it comes to footwear, a key category for Dick’s, 99 percent of shoes sold in the United States are imported from primarily China, Vietnam and Indonesia. Trump’s proposed tariff plans on these regions, as well as on Mexico and Canada, could vastly increase the cost of footwear for consumers in the U.S.
Dick’s Sporting Goods partners with top shoe brands like Nike, Hoka and Adidas, all of which have some level of exposure to potential tariffs. However, Gupta said Dick’s will leverage its strong partnerships with its key vendors and navigate the changes together.
“As more is learned, we’ll continue to navigate that in close partnership with our national brand vendors,” Gupta said. “Overall, if you look back to how we navigated this in 2018 and 2019, that will be kind of the playbook that will follow here again as more is learned.”
Like Dick’s, other shoe brands and retailers have already diversified their sourcing away from vulnerable regions like China in the wake of the supply chain meltdown in 2021. As such, executives from Amer Sports, Shoe Carnival and Under Armour have recently touted their abilities to weather another era of tariff changes under a new Trump administration. Notably, Steve Madden recently called out its longstanding efforts to diversify its supply chain from China and developing production capabilities in Cambodia, Vietnam, Mexico and Brazil.
Dick’s on Tuesday raised its 2024 outlook after reporting that its Q3 revenues were $3.06 billion, up 0.5 percent from the same quarter last year and ahead of the $3.03 billion expected by analysts surveyed by Yahoo Finance. Earnings per diluted share were $2.75, up 15 percent from last year and ahead of the $2.69 analysts were looking for. Comparable store sales were up 4.2 percent.
