This Week: Liberation Day’s Long Tail

What’s happening: We are in the thick of retail earnings season, with Target, Vans owner VF Corp., Urban Outfitters and T.J. Maxx reporting on Wednesday, and Hoka owner Deckers and Ralph Lauren following a day later.

Pricing Power: Expect headlines this week to focus on who’s raising prices and who isn’t. Target should follow Walmart in announcing broad hikes this summer, though the big-box retailer will have a trickier time of it after alienating many shoppers with its DEI walk back.

Deckers’ Hoka and Ralph Lauren could take their cues from Birkenstock and On, which said last week they believe their customers will stick with them even if they’re asked to pay a little more.

Inventory Dilemma: The less flashy news out of next week’s earnings is likely to involve inventories. Many retailers tried to game out the tariffs by importing extra stock in the first quarter and then slowing orders in April and May, only to quickly ramp up again once tariffs on Chinese imports were lowered.

Now, some have too much clothing on hand, some too little. Others may wind up facing both problems, overdoing it with basics and missing out on trends that bubbled up post-Liberation Day.

Predicting the future: After taking all of the above into consideration, it’s no wonder that so many retailers are pulling their 2025 outlooks. Normally this is a sign of distress, but investors are giving most companies a pass. Sometimes it’s better to ¯\(ツ)/¯ than guess wrong.

Let’s Make a Deal

What’s Happening: We’re nearing the halfway point of the Trump administration’s 90-day pause on “reciprocal” tariffs. Expect more countries to soon follow the UK and China in reaching agreements to lower or remove these levies.

Back and Forth: The path to these deals is going to have plenty of market-rattling twists and turns. While most analysts are expecting some sort of tempering of the April 2 tariffs, when, who and how much is up in the air. Expect plenty of exchanges like last week’s involving India, where Trump told reporters the country had agreed to remove all tariffs on US goods, only for India’s foreign minister to quickly shoot down that claim.

The Clock Is Ticking: It’s also possible there’s little news on the tariff front in the coming weeks. For retailers, this is almost as bad as keeping the tariffs as is, since they’ll be forced to place holiday season orders without knowing what they’ll be paying at the border.

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