Gap, On Holding among ‘worst positioned’ in apparel for tariffs, says Evercore

Evercore ISI analyst Michael Binetti says the Trump tariff plan revealed yesterday “puts a much higher tariff burden on Softlines brands than we expected.” While the roughly 21% incremental China tariff is “bad,” Vietnam is a bigger sourcing hub, making the 46% tariff on Vietnam “a far bigger issue than expected,” the analyst added. Among the apparel and footwear group, the firm views Gap (GAP), On Holding (ONON), Lululemon (LULU) and Deckers Outdoor (DECK)) as “worst positioned,” largely due to Vietnam sourcing. The firm calls out Birkenstock (BIRK) and PVH Corp. (PVH) as among the “best positioned” apparel makers. Nike (NKE) has “a lot of issues to solve to turn its brand around right now,” but the company has “the best chance at negotiating a deal with the Trump administration as a big US employer” and Nike’s scale makes it more important to retailers during a downturn, the analyst added.