Makers of goods from sportswear to luxury cars and chemicals painted a gloomy picture on Wednesday of consumer and industrial health, adding to concerns about the damage from U.S. President Donald Trump‘s trade wars and hitting share prices again.
Reuters
Increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday, as Trump steps up his campaign to reorder global trade in favour of the United States. Europe swiftly retaliated.
Trump’s plans for tariffs – and their back-and-forth implementation since he took office in January – have upended industries from cars to energy and unnerved businesses and investors. Worries that rising costs will reignite inflation, and that souring consumer sentiment could herald a U.S. recession, have caused stock markets to plunge.
“Nearly everyone in the economy is struggling to comprehend wild swings in Washington policies, and their implications for everyday decisions,” said Stephen Dover, chief market strategist at asset manager Franklin Templeton.
The constant flip-flopping over tariffs is paralysing industries from healthcare and retailing to agriculture, mining, energy, he said. Automakers, for example, are unable to plan while there is a threat of 25% tariffs on components made in Canada or Mexico.
“No reasonable auto executive can make such investments if the expected returns can be wiped out at the stroke of a pen,” Dover said.
Germany’s Porsche said on Wednesday it was assessing how it could pass on to consumers the cost of possible tariffs – expected to be 25% for U.S. imports from Europe – without pressuring its margins. That implies prices could be hiked to offset any drop in unit sales.
Even without higher tariffs, lower sales, high costs and trade concerns would hurt 2025 earnings, the luxury carmaker warned. Its shares were down 4.5%.
“For now, we are hoping there are solutions that will lead to a sensible tariff regime between regions,” Porsche CFO Jochen Breckner said on a press call after its annual results.
Two major South Korean steelmakers said they were considering options including possible investment in operations in the United States as the metals tariffs came into force. ‘ J.P. Morgan‘s chief economist Bruce Kasman said he saw a 40% chance of a U.S. recession this year, which would rise to 50% if Trump follows through on threats to impose reciprocal tariffs from April. He also warned of lasting damage to the United States as an investment destination if the administration undermines trust in governance.
Asked about a recession resulting from his trade policies, Trump said on Tuesday: “I don’t see it at all.” On Monday, he had declined to rule one out.
European shares were largely resilient on Wednesday as investors cheered news that Ukraine had accepted a U.S. proposal for a 30-day ceasefire with Russia.
But earnings from Puma and Zara-owner Inditex underscored concerns that uncertainties over trade are starting to hurt Main Street, curbing Americans’ spending on everything from detergent and clothing to travel.
Shares in Puma lost almost a quarter of their value and hit a nine-year low after the German sportswear company forecast slower sales growth this year due to soft demand in the United States and China. It highlighted trade disputes and currency volatility as challenges.
Spain’s Inditex reported a slower start to its first-quarter starting February 1, raising questions about weakening consumer demand, particularly in the United States, its second-biggest market. Its shares fell more than 8%, to their lowest since August.
CEO Oscar Garcia Maceiras said he was “optimistic” about the U.S. market despite the tit-for-tat trade measures, and that Inditex company was well positioned to adapt as needed. But echoing other executives, he said constantly changing geopolitical news was making long-term predictions difficult.
More than 900 of the 1,500 largest U.S. companies have mentioned tariffs on earnings calls or at investor events since the beginning of the year, according to LSEG data.
The tariffs are already driving prices for aluminium users in the United States to record highs. Data on Wednesday showed U.S. consumer prices increased less than expected in February, although tariffs on imports are expected to raise the costs of most goods in the months ahead.
German chemicals distributor Brenntag warned that 2025 will be another challenging year, shaped by economic and political uncertainty and subdued economic growth globally.
CEO Christian Kohlpaintner said the company was relatively insulated from import duties because it sources ingredients and sells its products locally.
But what he called the “confusing, inscrutable” situation makes it hard to run a business. Germany’s chemicals association VCI said on Wednesday it did not expect any recovery this year.
“The big risk is that companies stop spending and equally the consumer also stalls purchases,” said Justin Onuekwusi, chief investment officer at investment firm St. James’s Place.
Samsonite International SA says it continues to make progress toward a potential dual listing in the US, as profit fell amid weaker-than-expected consumer sentiment and slower retail traffic globally.
Samsonite
China was notably impacted by challenging macroeconomic conditions, Chairman Timothy Charles Parker said in an exchange filing Thursday. Business was also hit by reduced retail traffic and decreased consumer spending on premium and luxury brands, he added.
The American luggage firm saw net sales fall 2.5% to $3.59 billion for 2024, missing the $3.61 billion consensus by analysts, according to an exchange filing. Revenue in China fell only 2% despite soft consumer sentiment. Net income for the company as a whole also fell to $345.6 million from 396.9 million in 2023.
Samsonite is said to be working with JPMorgan Chase & Co. and Morgan Stanley toward a dual listing in the US. While the company would continue to trade in Hong Kong, it may consider making the US its primary listing venue, according to people familiar with the situation.
Chief Executive Officer Kyle Francis Gendreau said Thursday the dual listing would enhance value creation and make its securities more accessible to investors in the US and globally.
The company also plans to enhance its brand portfolio through accretive M&A in the long term.
Fossil Group announced on Thursday the appointment of Randy Greben to the role of chief financial officer, effective March 17.
Randy Greben – Courtesty
Greben succeeds Andrew Skobe, the U.S. watchmaker’s interim chief financial officer.
Greben will oversee Fossil Group’s global financial strategy, focusing on leading the organization’s financial turnaround and business transformation.
With more than two decades of financial leadership experience, Greben joins Fossil from Casper Sleep, where he served as chief financial and operating officer. Before that, the executive served as chief financial officer and treasurer of Blue Apron, after serving as senior vice president and chief financial officer at apparel retailer Ann Inc., where he was responsible for several new business activations for the Ann Taylor, Loft, and Lou & Grey brands.
Earlier in his career, Greben served as chief financial officer and general manager at Quidsi, a subsidiary of Amazon.com with flagship websites Diapers.com, Soap.com, and Wag.com.
“We are thrilled to welcome Randy, who brings deep financial acumen and operating expertise to the Company,” said Fossil Group chief executive officer, Franco Fogliato.
“Randy is a proven leader and change agent. His appointment will add tremendous value to our team as we pursue our turnaround plan and focus on value creation for all our stakeholders.”
Last month, Fossil Group announced an extension of its long-standing licensing agreement with luxury fashion brand Michael Kors, securing their partnership through 2027.
“For decades, Fossil Group and its iconic global brands have been part of the consumer experience,” said Greben. “I am thrilled to join the team at this pivotal time in the company’s turnaround to help advance their strategies and build long-term shareholder value.”
Sephora Chief Executive Officer Guillaume Motte has taken personal charge of its operations in China, the latest management shift at the LVMH-owned cosmetics retailer as it struggles to win over consumers in the world’s second-largest economy.
Bloomberg
Alia Gogi, who was appointed Sephora Asia’s president in 2020, resigned near the end of last year for family reasons, and Motte began directly overseeing the Greater China region at about the same time, according to people familiar with the matter who asked not to be identified discussing private matters. The move underscores the importance of China to LVMH’s second-largest brand, they said.
Jenny Cheah, regional managing director for other Asian markets including Southeast Asia, India and Oceania, remains in her role, some of the people said.
The leadership changes are LVMH’s latest effort to revive sales and market share in a region seen as having significant growth potential. While Sephora is on track to achieve global revenue of €16 billion ($17.4 billion) in 2025, sales in Asia and especially China must pick up if the retailer hopes to hit its revenue target of €20 billion in about three years, some of the people said.
Sephora declined to comment.
Though it is growing rapidly in the US and Europe, Sephora has been held back by intense competition and cultural differences in many Asian markets. In the past two years, it closed operations in Taiwan and South Korea, where it failed to compete with the dominant local cosmetics giant CJ Olive Young Corp.
In mainland China, Sephora has incurred millions of dollars in losses in its efforts to win customers. Last year, it cut hundreds of office and store staff just months after appointing former Nike Inc. Asia executive Ding Xia to run its Greater China business.
The brand has opened some 300 stores since entering China in 2005, but has struggled to grow market share, particularly after the pandemic when an economic slowdown pushed consumers toward cheaper beauty products. Home-grown Chinese beauty brands are also gaining popularity for being more suited to domestic preferences and for same-day deliveries.
Ding, who now reports directly to Motte, is leading a team that will focus on updating Sephora’s range of products in China, including identifying niche products and brands not easily found elsewhere, as well as featuring more Chinese home-grown brands on the shelves, some of the people said.
The development of Sephora remains one of the priorities of LVMH Moët Hennessy Louis Vuitton SE founder Bernard Arnault, who said in January the retailer was one of the key drivers of growth last year.
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