These US Consumer Stocks Face Higher China Risk, Analyst Survey Shows

While a standoff seems to be easing, where U.S.-China trade policies end up is anybody's guess.

Until then, several American brands are at risk, not only from the higher cost of imports from China but also from Chinese consumers ditching them in retaliation for President Donald Trump's instigations.

TD Cowen conducted a survey with about 2,000 Chinese consumers in February.

Its findings, released last week, show that overall preference for Western brands dropped to 9% from 14% in May last year, according to a CNBC report.

Estee Lauder (EL) retained first place in terms of highest awareness among Western beauty brands in China, but preference among consumers dropped to 19.6% of respondents from 24.3% last year.

In contracts, respondents noted their higher preference for Lancome and Chanel, respectively.

Broadly, Chinese consumers plan to spend less on beauty items over the next six months while increasing their preference for Chinese brands.

Nike (NKE) “lost meaningful preference in every category” compared to last year, while local competitors Li-Ning and Anta saw gains, according to the survey.

Nike makes about 15% of its revenue from China, according to CNBC.

While the survey found a 4-percentage-point drop in preference for foreign apparel and footwear brands, it also showed a 3-percentage-point increase in the inclination to buy the “best” product regardless of origin.

The survey found that Starbucks (SBUX) “lags peers in terms of value and quality perception improvement.”

This view could snowball into a sales issue for Starbucks as other coffee brands such as Manner, Tim’s, Cotti, %Arabica ,and M Stand have recently expanded in China.

TD Cowen analysts see Apple ranking among the better-positioned brands in China.

Shares of Estee Lauder, Nike, and Starbucks are down 20.8%, 24%, and 8.2% year to date, respectively.  

For updates and corrections, email newsroom[at]stocktwits[dot]com.