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3 Retail Stocks That Desperately Need a Tariff Break

Girls going shopping - stock image

Key Points

  • Investors remain unclear about the impacts of tariffs on the market.
  • Retailers with tight margins will be particularly susceptible to tariff pressures.
  • American Eagle, Levi Strauss, and VF Corporation have heavy exposure to China and other Asian countries that are facing higher tariffs from the United States.
  • MarketBeat previews the top five stocks to own by June 1st.

Whether they invest or not, most Americans are getting weary of tariff talk. Beyond the prospect of significantly higher prices, investors are unclear of what level of tariffs will be applied to which country.

For example, China stands to face the largest tariffs. At one point, President Trump threatened the country with 145% tariffs. That’s since been walked back, but the president made it clear that (for now), the tariffs won’t be 0%.

That's a wide range of outcomes for companies to consider. Many retailers went around this by frontloading merchandise in anticipation of tariffs. But that will only stretch so far. This is particularly going to impact apparel companies that have much of their supply chain in China or other Asian countries. Even with that, these companies operate on tight margins that make it impractical to onshore operations.

With that in mind, it’s important to know which retail stocks have significant exposure to China and other Asian countries. That's the case with the three stocks on this list. For that reason, investors may want to wait until, when, and if more tariff details are available before taking a position.

American Eagle May Be Cheap for a Reason

American Eagle Outfitters Today

American Eagle Outfitters, Inc. stock logo
AEOAEO 90-day performance
American Eagle Outfitters
$10.68 -0.79 (-6.84%)
As of 05/21/2025 03:59 PM Eastern
This is a fair market value price provided by Polygon.io. Learn more.
52-Week Range
$9.45
$24.26
Dividend Yield
4.68%
P/E Ratio
9.13
Price Target
$14.80

At a time when many stocks are overvalued, investors can’t say that of American Eagle Outfitters Inc. NYSE: AEO. The stock trades at a price-to-earnings (P/E) ratio of just 9.14, and its forward P/E is around 6x. Those are low numbers even by the company’s past standards. And the analyst forecasts on MarketBeat give the stock a consensus price target of $15.50, a 45% gain from its price as of this writing.

However, there are times when stocks are cheap for a reason. And this appears to be one of those times. AEO stock is down 33% in 2025 and 55% in the last 12 months. Revenue and earnings have been fine, although growth is slowing. The larger issue is the company’s exposure to Asian countries for its manufacturing. As of April 2025, American Eagle uses 101 factories in China to source its goods. It also relies on 67 facilities in Vietnam as well as other Asian countries.

The good news is that deals are likely with many of these countries fairly soon, with the exception of China. However, with so much exposure to China, the short-term outlook for AEO stock makes it a tough buy.

Levi Strauss May Not Be the Best Fit Right Now

Levi Strauss & Co. Today

Levi Strauss & Co. stock logo
LEVILEVI 90-day performance
Levi Strauss & Co.
$17.30 -0.54 (-3.00%)
As of 05/21/2025 03:59 PM Eastern
This is a fair market value price provided by Polygon.io. Learn more.
52-Week Range
$12.17
$24.34
Dividend Yield
3.00%
P/E Ratio
33.28
Price Target
$20.45

Levi Strauss & Co. NYSE: LEVI had the misfortune of reporting earnings on April 7, 2025, right after the tariff announcement. The company known for its iconic jeans put up solid numbers, and the stock bounced off its 52-week low. But the company’s exposure to Asian nations such as China, Cambodia, and Vietnam put it front and center in tariff talks.

However, like American Eagle, Levi Strauss stock is trading at an attractive P/E ratio that’s far below its historical average. The company also pays a dividend that yields 3.3% as of this writing. The payout ratio of 58% is somewhat elevated, but right now the dividend appears safe.

Analysts give LEVI stock a Moderate Buy rating with a consensus price target of $19.18 which is a gain of 21%. The announcement of a trade deal with a country like Vietnam could be an immediate lift for the stock, but it negotiations take longer than expected, investors should expect longer term downward pressure.

Tariffs Are Only the Latest Headwind for VF Corporation

VF Today

VF Corporation stock logo
VFCVFC 90-day performance
VF
$12.18 -2.25 (-15.61%)
As of 05/21/2025 03:59 PM Eastern
This is a fair market value price provided by Polygon.io. Learn more.
52-Week Range
$9.41
$29.02
Dividend Yield
2.96%
Price Target
$18.70

VF Corporation NYSE: VFC is the parent company of well-known apparel and footwear brands, including The North Face, Vans, Timberland, and Dickies. The stock had been a strong performer among apparel names until February 2025. However, the company is now facing challenges on multiple fronts, starting with declining year-over-year revenue, which may signal that consumers are beginning to pull back on discretionary spending.

VF will be one of the most impacted by tariffs. The company has approximately 600 factories in China and Vietnam. VF will look for solutions, but those will involve countries with lower tariff rates, not moving production back to the United States.

This dual headwind is showing up in recent analyst ratings. While the consensus price of $21.70 would be a gain of over 80%, Citigroup Inc. NYSE: C, Piper Sandler, and The Goldman Sachs Group Inc. NYSE: GS have sharply lowered their price targets in April 2025.

Should You Invest $1,000 in VF Right Now?

Before you consider VF, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and VF wasn't on the list.

While VF currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Chris Markoch
About The Editor

Chris Markoch

Editor & Contributing Author

Retirement, Individual Investing

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
American Eagle Outfitters (AEO)
4.8508 of 5 stars
$10.69-6.8%4.68%9.13Hold$14.80
Levi Strauss & Co. (LEVI)
3.5385 of 5 stars
$17.31-3.0%3.00%33.28Moderate Buy$20.45
VF (VFC)
4.158 of 5 stars
$12.18-15.6%2.96%-10.23Hold$18.70
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