What CEOs Are Saying: Tariffs and Transitions
Checking in with RH, Lululemon, and Vera Bradley
The retail sector closed Q3 with three companies reporting on the same day, each facing the same tariff environment but responding very differently:
Lululemon announced that tariffs and the loss of the de minimis exemption will cut Q4 gross margin by 580 basis points (410 basis points from trade policy alone) for a full-year impact of $210 million.
Vera Bradley took a $4 million write-off on unused television media credits from its previous turnaround attempt.
RH reported that it moved production to Vietnam to avoid tariffs, only to face a 46-47% tariff there instead.
The de minimis exemption previously allowed packages valued under $800 to enter the U.S. duty-free. Its removal means companies that shipped individual items directly to customers from overseas manufacturing facilities now pay import duties on every package.
For Lululemon in particular, which operated distribution centers in Asia to serve North American customers, this created immediate margin pressure that vendor negotiations and pricing alone can’t fully offset.
Two of the calls also dealt with CEO transitions.
