Morgan Stanley Ranks Retail Stocks By Trump Tariff Risk: These Names Could Take The Biggest Hit

The pressure from President Donald Trump’s trade tariffs is being felt across industries, but it is hitting retailers harder as they brace for weaker sales driven by high product prices from costly imports.

Morgan Stanley has cut earnings expectations for all retail companies it tracks. In a research note on Wednesday, the firm listed the varying degrees of potential tariff impact on each sub-sector.

Morgan Stanley said it seen a average 35% downside to 2025 earnings per share of companies selling non-durable items, such as apparel, shoes, and cosmetics, or "Softlies".

The analysis shows that profits at Foot Locker (FL), Kohl’s Corporation (KSS), and Under Armour (UAA) are most at risk.

Retail businesses that focus on durable goods, such as electronics and sporting gear, or “Hardlies”, might see an average 33% cut to their EPS estimates for this year. In this category, Five Below (FIVE), Academy Sports and Outdoors (ASO), and Dollar Tree (DLTR) are most at risk.

Morgan Stanley said, however, that its analysis is based on several factors, including a change to the tariff rates, and a wide range of outcomes is possible.

Below is the full breakdown:

Barely impacted: Kroger (KR), Albertsons Companies Inc. (ACI), O’Reilly Automotive (ORLY), AutoZone (AZO).

Moderately impacted: Ollie’s Bargain Outlet (OLLI), BJ’s Wholesale Club (BJ), Williams-Sonoma (WSM), Walmart (WMT), Costco (COST), Ulta Beauty (ULTA), The Home Depot (HD), Dollar General (DG), Lowe’s (LOW), Floor & Decor (FND).

Severely impacted (profits might flip to a net loss): Best Buy (BBY), Arhaus (ARHS), Tractor Supply Company (TSCO), Dollar Tree, Dick’s Sporting Goods (DKS), Academy Sports, Target (TGT), Advance Auto Parts (AAP), Five Below, Wayfair (W).

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