Gold prices set for weekly drop as strong dollar weighs; Trump tariffs in focus
On Monday, DA Davidson provided an update on the potential impact of US tariffs on Health & Beauty/Leisure stocks under their coverage. The firm highlighted that e.l.f. Beauty (NYSE:ELF), Mattel (NASDAQ:MAT), and Helen of Troy (NASDAQ:HELE) could be significantly affected by the tariff news. According to the firm’s analysis, e.l.f. Beauty, which holds a BUY rating, had previously managed to expand its gross margin despite the imposition of a 25% tariff on goods from China.
Mattel, also rated as BUY, is considered to have a lower risk due to its lesser exposure to China compared to the toy industry average, with half of its sales originating outside the United States. According to InvestingPro, the company shows strong fundamentals with liquid assets exceeding short-term obligations and management actively buying back shares. Helen of Troy, with a NEUTRAL rating, has not only China but also significant Mexico sourcing, which could be a factor in its vulnerability to tariffs.
In contrast, DA Davidson pointed out that certain stocks are more insulated from the effects of tariffs. The firm identified Estee Lauder (NYSE:EL), Interparfums (NASDAQ:IPAR), and Procter & Gamble (NYSE:PG), all with BUY ratings, as well as NEUTRAL-rated Clorox (NYSE:CLX), as the companies least likely to be impacted due to their Health and Personal Care (HPC) status. Additionally, WD-40 (NASDAQ:WDFC), which also has a BUY rating, was mentioned as having low exposure to the tariff changes.
The note from DA Davidson underscores the varying levels of risk that different companies face in light of the US tariff policies. While some companies have strategies or market positions that may shield them, others are anticipated to bear the brunt of the trade measures. The analysis serves to inform investors about the potential risks and resilience of these stocks in the face of new tariff implementations.
In other recent news, Mattel Inc .’s Chief Financial Officer, Anthony DiSilvestro, is set to retire in 2025. The toy company has initiated a search for his successor with the support of a leading executive search firm. DiSilvestro will continue as an advisor until August 15, 2025, to ensure a smooth transition. During his tenure, which began in 2020, Mattel achieved an investment-grade rating and realized over $400 million in cost savings.
In terms of financial performance, Mattel reported mixed results in its third quarter earnings call, with a 4% year-over-year decrease in net sales, totaling $1.84 billion. However, improvements were noted in adjusted gross margin, EBITDA, and EPS, attributed to supply chain efficiencies and share buybacks.
For future strategies, Mattel plans to adjust pricing to counteract the impact of tariffs and reduce its reliance on China for product sourcing. By 2027, the company aims to ensure that no single country accounts for more than 25% of its sourcing. Other priorities include investing to fuel organic growth, maintaining an investment-grade rating, exploring strategic mergers and acquisitions, and executing share buybacks. These are some of the recent developments surrounding Mattel Inc.
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