Hardlines retailers with high exposure to Asia sourcing and limited pricing power could face severe pressure on earnings due to the tariffs and a likely consumer-led moderate recession, Wedbush analysts said Wednesday.
Best Buy (BBY), Floor & Decor (FND), Wayfair (W), Williams-Sonoma (WSM), Arhaus (ARHS), RH (RH), Dick's Sporting Goods (DKS) and Academy Sports and Outdoors (ASO) are the most exposed, according to the research note.
Conversely, companies like CarMax (KMX) and auto parts retailers Genuine Parts (GPC), AutoZone (AZO), Advance Auto Parts (AAP) and O'Reilly Auto (ORLY) are well positioned, the team said. This also includes Chewy (CHWY), which has limited discretionary sales mix, the analysts noted.
"If reciprocal tariffs are dialed back almost in their entirety, except for China and Europe--a scenario we view as more likely--we see trading opportunities to the upside in the most oversold names since 'Liberation Day,' including RH, Wayfair, Floor & Decor and Arhaus," the analysts said.
Price: 62.37, Change: +6.20, Percent Change: +11.04
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