Cross apparel and footwear stocks off your buy list, analysts are suggesting in the aftermath of President Trump's sweeping 'Liberation Day' tariffs.

"Until visibility improves, we expect investors show very little appetite for investment in our coverage universe," said Stifel apparel analyst Jim Duffy in a note to clients early Thursday.

Duffy has coverage on top apparel and footwear names Nike (NKE) and Lululemon (LULU).

The president on Wednesday imposed a baseline tariff rate of 10% on all US trade partners, which will go into effect on April 5. Additional tariffs will be placed on countries that the Trump administration considers to be the worst offenders in balance of trade.

The list of offenders includes the key apparel and footwear sourcing markets of China, Vietnam and Cambodia. China will see an estimated reciprocal tariff of 34%, while Vietnam clocks in at 46%, and Cambodia is at 49%.

Listen: How the fashion industry may respond to Trump tariffs

Footwear and apparel goods sold in the US are nearly entirely sourced from international suppliers, mostly based in Asia. The likes of Nike have spent many decades building up Asian manufacturing hubs to capture low labor costs and government incentives to attract foreign investment.Vietnamese workers work at a sportswear production line for Nike at the Nha Be garment company in Ho Chi Minh City, 15 February 2003. (AFP via Getty Images)·- via Getty Images

Now that cushy arrangement could be up in smoke as a global trade war ensues. The impact to profits could be huge for the apparel and footwear industry.

Consider Nike as a proxy for the sector: 11% of its products are sourced from China, and 44% from Vietnam. They are the company's top two sourcing countries, according to Duffy.

Duffy calculates the tariffs as they stand, not assuming Nike raises prices and switches up sourcing countries, could hit earnings per share this year by a whopping $1.69.

Shares of Nike are getting pounded over 9% in premarket trading on Thursday. Others in the space are seeing big-time sell-offs, too.

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"The apparel and footwear brands have been good at moving to low cost sourcing hubs over time, but the current tariff plan leaves nowhere to hide," notes EvercoreISI analyst Michael Binetti in a note of his own today. "On average, brands in our coverage source about 45% of goods from Vietnam (with names like On Holding (ONON) as high as 90%).

Here is the Wall Street reaction.

Stifel analyst Jim Duffy

"Announced reciprocal tariffs are broader and higher than expected. The supply chain for lifestyle brands is entrenched in Asia and not easily relocated. If seen through, incremental expense from these tariffs is a significant challenge to profitability for our coverage universe. Until visibility improves, we expect investors show very little appetite for investment in our coverage universe. Most challenged are those with Southeast Asia manufacturing concentration, high U.S. revenue exposure, and thin margins including Columbia (COLM), Nike, and Under Armour (UAA). Both Wolverine Worldwide (WWW) and VF Corp. (VFP.HA) face added challenge from levered balance sheets. Directionally better insulated are those with diversified geographic revenue bases and higher operating margin including Birkenstock (BIRK), Levi's (LEVI), and Lululemon though we note, profitability could be impacted significantly for these businesses as well. Conceptually, multi-branded retailers and ecommerce platforms like Dick's Sporting Goods (DKS) and Revolve (RVLV) have less direct exposure though they will have to pass along brand price increases to inflation fatigued consumers."

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Jefferies analyst Randy Konik

"Through Q4 earnings, many companies incorporated the risk of previously announced tariffs in their fiscal 2025 guidance and discussed mitigation strategies to move supply chains to reduce their impact. The reciprocal tariff announcement on April 2 has rendered these initiatives essentially fruitless as major tariffs have been applied to dozens of countries globally. With Asia production hubs particularly hit (China 34%; Vietnam 46%; Cambodia 49%), all footwear and apparel company margins will be affected as costs rise."

Jefferies analyst Corey Tarlowe

"As a sub-sector, off-price appears moderately exposed to tariffs. The resounding sentiment from the off-price C-suites is that the sector is well-positioned to take advantage of any dislocation in the market due to the nature of the business model. However, even off-price can be subjected to pressures from higher prices. On its latest earnings call, TJX Companies (TJX) specifically called out its sourcing efforts from Europe as a key differentiator, but now the EU will be subjected to 20% tariffs. We expect off-price's value proposition could resonate well with customers ahead, given the uncertainty."

EvercoreISI analyst Michael Binetti

"Tariff plan will drive unprecedented uncertainty for apparel and footwear makers. The Trump plan puts a much higher tariff burden on softlines brands than we expected. Further, the impact to demand as the consumer’s entire basket of goods starts to inflate makes it nearly impossible to model out revenues with conviction. As we’ve seen with this administration before, the plan could change fast, but in combination, the above inputs create a scenario with uncertainty that mirrors the early days of COVID for softlines, in our view. We expect softlines to be one of the more pressured stock sectors in the near-term. In this note, we start to stratify which brands have the most earnings risk, as well as what we think are the important themes the market will prosecute first."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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