Tariffs could hurt Under Armour short term

But analyst expects company won’t be hurt over time by battle with China

Under Armour could be hurt short-term by the Trump administration’s latest round of tariffs on Chinese goods, one analyst said Tuesday.

But the 10 percent duties on $200 billion worth of Chinese imports likely won’t have a long-term effect, said Camilla Yanushevsky, an equity analyst with CFRA Research in Rockville.

About 20 percent of items singled out by the tariffs announced Monday fall in the textiles, apparel and luxury goods industry, according to a CFRA analysis.

“Given the fast-moving nature of the fashion industry and the complexity of redrawing decades-old supply chains, we foresee apparel and footwear makers hiking prices and thereby shifting most of the burden to consumers, at least in the short term,” Yanushevsky said in a research note. “Long term, we are optimistic on their ability to adapt — just as the industry develops contingency plans to circumvent adverse weather conditions.”

Baltimore-based Under Armour said it expects any potential impacts of the tariffs to be immaterial to its business in the current fiscal year.

The company manufactured about 61 percent of its sports apparel and accessories last year in China, Jordan, Vietnam and Malaysia. It makes most of its footwear in China, Vietnam and Indonesia, according to company filings. But it sources less than 15 percent of its total global products from China, the company said.

CFRA has a hold recommendation on Under Armour stock, with a 12-month target of $18 per share. The stock was trading at $17.66 a share at midday Tuesday.

The tariffs, set to take effect Monday and increase to 25 percent in January, came on the heels of previously imposed tariffs on $50 billion worth of Chinese imports. The Chinese government retaliated Tuesday.