Nike, Lululemon Rebound as Trump Touts Call With Vietnam Leader

Shares in companies that have large manufacturing operations in Vietnam, including Nike Inc. and Lululemon Athletica Inc., soared Friday after President Donald Trump said Vietnam was willing to eliminate tariffs to avoid new US levies.

Nike shares erased an earlier loss to gain as much as 5.9 percent, while On Holding AG and Skechers USA Inc. rose at least 8 percent. Lululemon shares meanwhile jumped 4 percent.

Apparel and shoemakers’ shares tumbled Thursday after the president unveiled a 46 percent levy on the Southeast Asian nation, where several had shifted manufacturing in recent years after Trump hit China with levies during his first term. Nike shares fell 14 percent to close at the lowest level since November 2017, while On Holding and Skechers also closed down double digits.

Trump said Friday on social media that he’d had a “very productive call” with Vietnamese leader To Lam, who said the country wants to “cut their tariffs down to zero.”

Vietnam’s willingness to negotiate also signals that other production hubs, such as Indonesia and Cambodia, may try to reduce the severity of the levies as well, Bloomberg Intelligence analyst Poonam Goyal said.

“There’s no way, with the way it was yesterday, that these companies could’ve mitigated these rising costs,” said Goyal. “It was just impossible.”

Shares in household appliance maker SharkNinja Inc., which has shifted production to Vietnam and other countries, reversed an earlier drop of 13 percent to gain 8.4 percent. Home furnishings companies with exposure to Vietnam like RH also pared losses, while Wayfair Inc. was briefly halted for volatility as it erased a 19 percent decline to jump as much as 7.3 percent.

Elsewhere, shares in apparel retailers reliant on the country including Gap Inc., Abercrombie & Fitch Co. and Victoria’s Secret & Co. each surged as much as 8 percent or more. Trump’s update also buoyed shares in European companies. Adidas AG shares turned positive, and athletic retailer JD Sports Fashion Plc also erased losses.

Vietnam, which has a trade surplus of more than $123 billion with the US, has worked to soothe Trump since he re-entered the White House in January by urging purchases of US goods and cutting its own tariffs on US cars, ethanol and liquefied natural gas. Prime Minister Pham Minh Chinh said shortly after Trump returned to office that he’d be willing to visit him at Mar-a-Lago to “golf all day long” if it would settle these trade squabbles.

Before Trump’s Friday post, the country had asked the Trump administration to put the planned tariff on hold for up to three months to allow for negotiations.

About half of all Nike brand shoes and 39 percent of Adidas shoes are made in Vietnam, according to regulatory filings, with the country being the largest supplier of footwear for both companies. Nike has already said it expects its gross margin to decline sharply this quarter, in part due to US tariffs on products from China and Mexico.

Nike shares are still down more than 20 percent this year, while Lululemon is off more than 30 percent.

By Katrina Compoli, Kim Bhasin and Matthew Griffin

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