In another twist and turn in President Donald Trump’s trade war, the U.S. and China have revealed the framework for a new deal that would see much lower-than-expected tariffs — if it comes to fruition. So where do footwear firms go from here?
The truce would see the tariff rate on China imports to the U.S. set at 55 percent. Negotiators have until Aug. 10 to fine-tune the deal’s terms. (Right now, during a 90-day period, the tariff rate stands at 30 percent.) The agreement still requires the approval of both U.S. President Donald J. Trump and China President Xi Jinpin.
With the 90-day pause in effect through Aug. 14, many goods that can be brought in early have already been shipped and received or are on their way.
Late August and early September is when the bulk of the merchandise for the holiday season typically arrives in U.S. ports. Goods exported on Aug. 14 or thereafter would be subject to the higher rate. But there could be minimal impact this year if most merchandise were already pulled forward, leaving new items coming in limited to fill-ins as companies replenish or chase sales.
There still could be some additional price increases on select shoe styles later in the year. As for 2026, there’s enough time for companies to plan ahead to minimize tariff risk next year, and many already have plans to further minimize China sourcing by yearend.
Public footwear firms for the most part have pulled back on future earnings guidance due to tariff uncertainties. And any mention of guidance has reflected current tariff rates on a presumption that they would last for the back half of fiscal 2025, or 10 percent globally, with the exception of China at 30 percent. Many also moved with quick speed to shift their sourcing strategies, further limiting future impact from tariff increases — at least for this year.
In a conference call to Wall Street on Tuesday after posting first-quarter earnings results, Academy Sports + Outdoors CFO Carl Ford said the company pulled forward $85 million in domestic inventory receipts in the first quarter at pre-tariff prices. He said the company also partnered with factories and overseas suppliers to reduce costs, and cut back on over $120 million in inventory receipts so it has flexibility later in the season to possibly chase sales. The specialty chain also shifted production out of China to other countries, such as Cambodia and Bangladesh, which currently have a tariff pause rate at 10 percent through July 9.
“These actions have positioned us well to support the spring selling season, and we will continue to evaluate the environment and take further actions as deemed necessary. We anticipate our inventory levels will normalize as we move through the year,” Ford said.
As for any other possible strategic actions or even some price increases in the back half of the year, Academy’s chief merchandising officer Matt McCabe said in a telephone interview that the retailer has “done a good job already in mitigating any tariff impact we might have. We’ve done that with partnering with our vendor base through diversification, through pulling forward existing pre-tariff inventory.”
Steve Madden Ltd. moved extra quickly to limit the potential impact of tariffs on imports from China, taking actions that include moving production components from China to other countries, said the company’s chairman and CEO Edward Rosenfeld during Madden’s first-quarter conference call last month. Last year, sourcing of U.S. imports from China was 71 percent, with an expectation that it would be lowered to the mid-teens for fall ’25 and the midsingle-digits in spring ’26.
In last month’s call, the CEO said it now has less than 5 percent in China for value-price apparel, which is taking longer to move. Up next will be moving the sourcing for Kurt Geiger out of China, which is currently at 80 percent. The company disclosed last month that it recently closed on its $360 million acquisition of the British footwear and accessories brand. Rosenfeld, who said the company has been working with factory partners and suppliers on price concessions, also noted that the company has strategically raised prices on select items.
Crocs CEO Andrew Rees said last month that the company is being “super strategic” on pricing, and that it has done some “very targeted price increases” to mitigate selective issues. To further mitigate the impact from tariffs, Crocs has also rapidly shifted sourcing to other countries, and it has the option of electing to cancel some orders from China if it chooses to go that route.
Nike Inc. doesn’t report fourth-quarter results until June 26, but it has already raised some retail prices at its U.S. stores, averaging between $2 and $10. But not all products are seeing price increases. While Nike apparel and equipment will see modest increases, and between $100 and $150 will see increases up to $5 and those starting at $150 will be up to $10 more, any items under $100 will remain at current price points. There are no increases for kids’ products, whether footwear or apparel, and there are no price increases for any Jordan product. Moreover, Nike’s popular Air Force 1 sneaker, a work shoe favorite among service providers, will remain priced at $115.
At Wolverine World Wide Inc., CEO Christopher E. Hufnagel said last month that the company’s brands are sold through an “asset-light model” that’s powered largely through wholesale and distributor partnerships. To protect profitability, he said the company’s diversified supply chain and dual sourcing flexibility has helped it limit its exposure to elevated tariffs on goods sourced in China into the U.S. market. “We expect this will amount to be less than 10 percent of our volume this year, and we’re targeting to push this down to near zero in 2026,” the CEO said.
At Caleres Inc., president and CEO Jay Schmidt said last month that the company saw additional costs in the first quarter associated with moving goods and canceled orders related to tariffs, and that inventory levels were up 8.1 percent versus year-ago levels. And while the prior guidance was to have goods sourced from China at 25 percent or less in the back half of 2025, the company has moved aggressively to lower that to 10 percent or less. The company has also selectively raised prices on some styles.
Elsewhere on the retail front, Boot Barn CEO John Hazen said the “fundamentals” of the business remain strong, and that the company is “confident in our ability to navigate the current tariff environment through our diversified sourcing capabilities and established vendor partnerships.”
And at Dick’s Sporting Goods Inc., CFO Navdeep Gupta said last month at the retailer’s first-quarter conference call that the chain was “working closely with our manufacturing and brand partners to mitigate potential impact and we are making continued progress in diversifying our direct sourcing footprint.” Gupta said inventory levels were well positioned across key categories. “We have navigated similar environments before, and we are confident we have the team, tools and relationships to manage through this,” he told Wall Street analysts.
Meanwhile, the U.S. labor department on Wednesday released its latest inflation report. According to the Consumer Price Index (CPI) for May, inflation rose a modest 0.1 percent from April’s data report. CPI was up 2.4 percent from a year earlier. Core inflation, stripping out food and energy, rose 2.8 percent year-over-year and is at the slowest pace since spring 2021. On a seasonally adjusted basis from April, apparel prices were down 0.4 percent.
Many economists were expecting inflation data to rise, given the forecasted impact from tariffs. Trump’s reciprocal tariffs were announced in April.
“We believe it is too early to declare victory and say that the significant increase in tariffs over the past few months will have no material impact on consumer price growth,” noted economists from Wells Fargo in a report on Wednesday. “Most of the tariff increases occurred over the March-May period, and we doubt enough time has elapsed for the full effects of these policy changes to be felt on output, hiring and pricing.”
The Wells Fargo economists expect core CPI to “rise to a little over 3 percent the next few quarters,” mostly due to higher tariffs.
According to data on Wednesday from the Footwear Distributors and Retailers of America (FDRA), retail footwear prices slid 1.6 percent from a year ago in May, representing the steepest drop in more than four years. May’s tame inflation report helped, as prices were lower across each target market led by men’s, which was down 2.4 percent. Women’s slipped 1.5 percent and children’s footwear prices inched down 0.5 percent. Gary Raines, FDRA’s chief economist, cautioned that change is coming. He told Footwear News of “mounting evidence upstream in the supply chain of surging average duties per pair on footwear imports.” Higher duties could soon push the average landed cost of footwear imports higher, which could pressure retail footwear prices to climb later this year, he concluded.
