Lululemon shares roiled by Vietnam exposure

Seeking Alpha News (Thu, 03-Apr 12:09 PM)

  • Shares of Lululemon (NASDAQ:LULU) took a dive on Thursday, falling to an eight-month low as the company’s presence in Vietnam exposes its bottom-line to President’s Trump’s 46% tariff on merchandise imported from the Southeast Asian country.
  • Lululemon (NASDAQ:LULU), along with other companies like Nike (NKE), Under Armour (UA) (UAA), and Abercrombie & Fitch (ANF), moved much of their manufacturing into Vietnam from China to sidestep the worsening trade relationship between Washington and Beijing.
  • The company began moving production to Vietnam in 2016, reducing its manufacturing in China by nearly half in the subsequent three years.
  • While a third of Lululemon’s (NASDAQ:LULU) production is conducted in Vietnam, the company also does business in Sri Lanka (11%), Cambodia (9%), and Indonesia (6%).
  • Shares are down 11% at midday.