Tariff Impact Tracker • 2Q-2025 Earnings Season

Analysis

Conagra Brands experienced an impact on its financial results during the second quarter of fiscal 2026 due to increased costs stemming from changes in trade policies. Gross tariff inflation for the second quarter was consistent with the company's expectations.

For fiscal year 2026, the company expects tariffs to negatively affect its costs of goods sold. The guidance incorporates a 50% tariff rate on imported tin plate steel and aluminum, a 20% rate on limited imports from China, and various country-specific reciprocal rates.

These combined tariffs are anticipated to increase the cost of goods sold by approximately 3% annually before any mitigating actions. To offset this, the company is implementing accelerated cost savings initiatives, exploring sourcing alternatives, and executing targeted pricing actions.

Although some favorability in tariffs was noted in the first quarter, the overall impact on the year is limited because over 50% of the company's tariff exposure relates to tin plate, where tariff levels have not changed. The company expects net tariff expense, after mitigation, to increase sequentially throughout the remainder of fiscal 2026.

Sources

• "In the second quarter of fiscal 2026, we saw an impact to our financial results due to increased costs resulting from changes to trade policies." (Filing)

• "Guidance anticipates core inflation slightly higher than 4%. In addition, the company expects an impact to fiscal 2026 from previously announced U.S. tariffs." (Filing)

• "Combined, these tariffs are expected to increase cost of goods sold by approximately 3% annually, prior to mitigating actions including accelerated cost savings initiatives, sourcing alternatives, and targeted pricing actions." (Filing)

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Analysis

Tariffs have significantly impacted the company's financial performance by increasing product costs and reducing gross margins. These effects were particularly noted in the North America region, although the overall business felt the headwinds.

During the second quarter of fiscal year 2026, the company's gross margin decreased by 300 basis points to 40.6%. This decline was primarily attributed to increased product costs resulting from higher tariffs in North America, alongside inventory obsolescence in Greater China. Tariffs also led to increased product costs within the company's inventory balance. Specifically in North America, gross margins experienced a 520 basis point gross impact from new U.S. tariffs; however, other operational actions limited the overall decline in North America's gross margin to 330 basis points.

Looking ahead to fiscal year 2026, the company projects $1.5 billion in annualized incremental product costs due to higher U.S. tariffs. This is estimated to represent a gross headwind of approximately 320 basis points to the gross margin for the full fiscal year. The company is implementing actions to mitigate this impact, aiming to reduce the net headwind on gross margin to approximately 120 basis points for fiscal year 2026. For the third quarter of fiscal year 2026, guidance indicates a 315 basis point impact on gross margins from higher gross product costs attributable to new tariffs.

Sources

• "Tariffs have also obviously added a significant headwind to overcome." (Elliott Hill)

• "As we highlighted last quarter, we are also navigating new structural headwinds from the $1.5bn of annualized incremental product costs due to higher U.S. tariffs." (Matt Friend)

• "Gross margins declined 300 basis points to 40.6% on a reported basis, primarily due to increased product costs due to higher tariffs in North America, as well as inventory obsolescence in Greater China that was not contemplated 90 days ago." (Matt Friend)

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Analysis

Global trade policy changes have negatively affected the company's operating results, contributing to headwinds in adjusted operating income. This impact was evident in the second quarter and first half of fiscal year 2026.

International export volumes experienced declines, specifically on the China to U.S. lane, due to these global trade policies. Additionally, the August 2025 removal of the de minimis exemption for goods imported into the U.S. from non-China countries led to increased credit losses and customs-related brokerage fees, impacting Federal Express's other operating expenses.

In response to these challenges, the company implemented mitigation strategies. This included reducing trans-Pacific Asia-bound capacity for its own 'Purple Tail' aircraft by approximately 25% year-over-year and third-party 'White Tail' capacity by nearly 35%. Capacity was also strategically shifted to the Asia to Europe lane, which maintains an attractive business-to-business (B2B) mix of over 75% and high load factors.

The global trade environment remains uncertain, with continued pressure expected on international revenue and LTL freight services. The company's full fiscal year 2026 outlook includes an anticipated $1 billion headwind to adjusted operating profit stemming from these global trade policies.

Sources

• "We grew adjusted operating income by $231mn despite the headwind from global trade policy changes..." (John Dietrich, Executive Vice President and CFO)

• "Additionally, since the third quarter of 2025 there have been significant changes within the global trade environment, such as the August 2025 removal of the de minimis exemption for goods imported into the U.S. from countries other than China. The uncertain and evolving global trade environment is negatively affecting our results in the second quarter and first half of 2026." (Filing)

• "As I mentioned last quarter, embedded in our assumptions is the $1bn in headwind to adjusted operating profit from the global trade environment, offset by $1bn in transformation-related savings." (John Dietrich, Executive Vice President and CFO)

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Analysis

Tariffs are contributing to input cost inflation for fiscal year 2026. The company's original guidance accounted for an expectation of approximately 1 to 2 percentage points of additional headwind to a base inflation of about 3%, with tariffs comfortably within this additional headwind. This overall input cost inflation is expected to outpace cost savings initiatives, serving as a headwind to operating profit and adjusted diluted EPS for fiscal 2026.

The phasing of the tariff impact was minimal in the first quarter, escalated in the second quarter, and is anticipated to increase further in the second half of fiscal 2026. The company plans to mitigate some of this tariff-related headwind over the course of the fiscal year.

Sources

• "Our original guidance included an expectation of about 1-2 points of additional headwind to base inflation of about 3%. Our base inflation forecast, despite puts and takes, remains roughly around that 3% mark. Tariffs are certainly comfortably within that range." (Kofi Bruce, Company - CEO)

• "And the tariff phasing was pretty minimal in Q1, stepped up in Q2, and we'd expect in the second half for that to step up a little further. So in aggregate, 3% base, we're still comfortable with the 1%-2% guide on the tariff additional headwind." (Kofi Bruce, Company - CEO)

• "The Company expects the combination of these growth investments, input cost inflation (including the impact of tariffs), and normalization of corporate incentive expense will outpace its expectation for Holistic Margin Management cost savings of 5 percent of cost of goods sold, $100 million in global transformation and other efficiency savings, and benefits from a 53rd week in fiscal 2026." (Press Release)

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Analysis

Government actions involving tariffs impact the company's merchandise costs, with the degree of exposure determined by the type of goods, imposed rates, and timing. Tariffs are expected to adversely affect financial results. The company's buyers actively work to minimize the impact of tariffs for members.

Mitigating strategies include adjusting the country of production for certain items and increasing the sourcing of goods manufactured in the U.S. The company also consolidates global buying efforts to achieve lower costs across its markets. Leveraging the Kirkland Signature brand is another strategy, as it offers greater control over the supply chain.

Item assortment changes are also implemented as a response to tariffs. The company replaces tariff-affected items with alternative value products, such as seasonal food, health and beauty items, and live goods. Many of these alternative products are U.S.-produced, which largely exempts them from tariff implications. The company has observed that tariff-related uncertainty can contribute to month-to-month fluctuations in sales.

Sources

• "Government actions in various countries relating to tariffs affect the costs of some of our merchandise. The degree of our exposure is dependent on (among other things) the type of goods, rates imposed, and timing of the tariffs. Higher tariffs are more likely to adversely impact rather than improve our results." (Filing)

• "our buyers continue to do a great job reducing the impact of tariffs for our members. The strategies being deployed to achieve this include changing the country of production for some items, sourcing more items produced in the U.S., consolidating buying efforts globally to lower the cost of goods across all our markets, and leaning into Kirkland Signature, where we have more control over the supply chain." (Gary Millerchip, Earnings Call)

• "Additionally, we are changing our item assortment where appropriate. In replacement of some tariff-impacted items, our buyers have sourced a number of alternative great value items, including seasonal food, health and beauty, and live goods. In many cases, these items are produced in the U.S. and are largely unimpacted by tariffs." (Gary Millerchip, Earnings Call)

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Analysis

Tariffs and trade restrictions, particularly those impacting China, negatively affected Synopsys' financial performance in fiscal year 2025. The company's revenue from China declined, with the classic Synopsys business (EDA and IP) experiencing a more pronounced downturn. This decline was attributed to an inability to sell advanced solutions in the market, as well as entity lists and technology restrictions.

These restrictions led to a shift in market share within China, as customers sought alternative solutions from local companies when Synopsys was unable to serve them. This erosion of market share occurred for customers the industry could not support due to governmental limitations.

In contrast, the Ansys portfolio, recently acquired by Synopsys, showed resilience in China. The Ansys business primarily serves a broader market that is less affected by trade restrictions, allowing for continued growth.

For fiscal year 2026, Synopsys' guidance incorporates these ongoing challenges. The company assumes that the difficult environment in China and existing restrictions will persist. This pragmatic outlook has led to adjusted growth expectations, particularly for the IP business, reflecting the continued impact of these headwinds.

Sources

• "Geographically, China continued to be challenged, consistent with our commentary last quarter. China ended 2025 down 18%. Excluding Ansys, China was down 22% this year." (Shelagh Glaser, CFO)

• "As it relates to China, there is some share shift happening inside China because when you restrict the sale of EDA or IP, the customers in China are looking for alternatives. And that is happening, and it's happening at an accelerated rate." (Sassine Ghazi, CEO)

• "So we expect the environment to remain challenging in China. That's why, when we look at fiscal year 2026 compared to 2025, what we are taking into account in our forecast and guide is truly a pragmatic, balanced view. We're not assuming that the environment is going to change in the next one or two quarters to the positive. So therefore, we continue on de-risking it in our guide for fiscal year 2026." (Sassine Ghazi, CEO)

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Analysis

Tariffs were identified as an evolving macroeconomic condition that has affected the company's business and consumer shopping behavior. The company adapts its logistics, transportation, supply chain, and purchasing processes in response to these conditions. However, no specific financial impact or quantifiable details attributable solely to tariffs were provided in the reporting period.

Sources

• "Evolving macroeconomic conditions, including inflation levels, tariffs, and high interest rates, have affected, and continue to affect, our business and consumer shopping behavior." (Filing)

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Analysis

The company's operations in 2025 have been influenced by macroeconomic conditions, including uncertain tariff policies, which have created a challenging retail environment. The U.S. administration's actions to increase tariffs on products imported into the U.S. have introduced uncertainty regarding global trade and the company's cost structure. A significant portion of the company's products, particularly for the Brand Portfolio segment, are sourced from third-party facilities outside the U.S., primarily in Asia. Additionally, the U.S. Retail and Canada Retail segments utilize domestic suppliers who frequently import merchandise from Asia.

The company is implementing mitigation strategies to address tariff impacts. These actions include adjusting sourcing diversification by optimizing supplier locations to reduce risk, maximize flexibility, and decrease costs. These efforts, combined with disciplined expense management, contributed to an increase in operating income for the Brand Portfolio segment, despite lower top-line sales. However, the company acknowledges that sourcing diversification could introduce risks such as product quality issues, higher product costs, or challenges in timely sourcing of desired quantities. There is no assurance that the company can fully mitigate the impact of existing or new tariffs.

Evolving trade policies also contribute to increased uncertainty in the assumptions used for impairment tests of goodwill and indefinite-lived intangible assets. This heightened uncertainty could adversely affect the financial performance and valuation of these assets, potentially leading to future impairment charges if macroeconomic conditions and trade policies worsen.

Sources

• "The U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. The numerous announcements of changes to and delays of tariff policies has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure." (Filing)

• "For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source from to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere." (Filing)

• "Operating income for the quarter increased by $500,000 year over year despite a lower top line, a result driven by our disciplined expense management and tariff mitigation efforts." (Doug Howe (Chief Executive Officer))

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Analysis

The company's first quarter fiscal 2026 results were negatively impacted by tariffs, primarily through an unfavorable non-cash LIFO charge of $98M. This LIFO charge reduced operating profit by 212 basis points and diluted earnings per share by $4.39. Excluding this LIFO impact, operating profit would have increased by 4.9% and adjusted diluted earnings per share would have increased by 8.9% compared to the prior year. This LIFO charge is attributed to higher costs from tariffs affecting inventory layers.

The company is implementing several strategies to mitigate the impact of tariffs. These include negotiating lower costs with vendors, diversifying sourcing from different countries of origin, and adjusting retail prices. These efforts, combined with a reduction in EPA tariffs on China from 20% to 10%, have resulted in a lower cost impact than initially expected.

Despite the mitigation strategies and tariff reductions, the company anticipates continued higher costs from tariffs to influence merchandise inflation and average ticket prices in the upcoming quarters.

Sources

• "Operating profit comparisons were negatively impacted by an unfavorable non-cash LIFO impact of $98.0 million." (Form 10-Q)

• "This quarter, we had a $98 million LIFO charge, or 212 basis points unfavorable LIFO comparison to last year. Excluding the LIFO comparison, we had a 9 basis points improvement to gross margin driven by margin actions, which offset a significant rate headwind from the shift to a faster-growing commercial business." (Jamere Jackson, Earnings Call)

• "We're planning a LIFO charge of approximately $60mn for each of the next three quarters as we're continuing to experience higher costs due to tariffs that impact our LIFO layers." (Jamere Jackson, Earnings Call)

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Analysis

Victoria's Secret & Co. reported that tariffs negatively impacted its operating income. For the third quarter of 2025, tariffs, net of mitigation efforts, reduced operating income by $15 million. Year-to-date 2025, the negative impact on operating income from tariffs was $25 million.

These tariff costs also partially offset improvements in the gross profit during the third quarter of 2025. While gross profit dollars increased due to higher net sales and reduced promotional activity, increased tariff costs limited the overall improvement. Similarly, the gross profit rate increase was partially offset by increased tariff costs.

The company stated it faces ongoing uncertainty in the macro environment regarding U.S. tariffs on imports and potential retaliatory measures. Management continues to identify and execute mitigation strategies to address the evolving tariff environment.

Sources

• "We estimate tariffs, net of mitigation efforts, negatively impacted operating income (loss) by approximately $15 million and $25 million in the third quarter of 2025 and year-to-date 2025, respectively." (Filing)

• "We continue to identify and execute mitigation strategies as the tariff environment evolves." (Filing)

• "The gross profit rate increase compared to the third quarter of 2024 was primarily driven by leverage in buying and occupancy expenses as a result of the increase in net sales and a decrease in promotional activity, partially offset by an increase in tariff costs." (Filing)

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Analysis

Tariffs represented a headwind of approximately $15M, equivalent to 100 basis points, on the gross margin in the third quarter of 2025. This impact was offset by other operational factors, including reduced promotional activity and increased regular-price selling.

The company's guidance for fiscal year 2025 anticipates a net tariff impact of approximately $90M. This includes an estimated $65M of tariff pressure expected in the fourth quarter of 2025. Additionally, the fourth quarter 2025 gross margin rate is expected to experience approximately 300 basis points of pressure due to tariffs, although this is partially mitigated by a disciplined promotional strategy and leverage on buying and occupancy expenses.

Mitigation strategies to address tariff impacts include optimizing costs with vendors and diversifying sourcing. The company is also adjusting its freight mix to be more efficient, favoring ocean freight over air freight where possible, which affects inventory timing. Furthermore, select pricing adjustments are being implemented through targeted promotions and strategic price modifications to address value proposition gaps in the marketplace.

Sources

• "Altogether, these factors allowed us to more than offset approximately $15mn or 100 basis points in tariffs in the quarter." (Company - CEO)

• "Our guidance for the full year 2025 now assumes net tariff impact of approximately $90mn, with approximately $65mn impacting the fourth quarter." (Company - CEO)

• "The decline reflects estimated net tariff pressure of approximately 300 basis points, partially offset by our disciplined promotional strategy and the strength of our operational model, which continues to deliver leverage on buying and occupancy expenses as net sales grow." (Company - CEO)

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Analysis

Tariffs have contributed to global trade uncertainty, leading to increased prices for components and finished products and services. Hewlett Packard Enterprise (HPE) has attempted to mitigate these adverse impacts by leveraging its global supply chain and implementing pricing measures. However, these strategies are not expected to fully offset potential limitations on revenue and margin growth in the near term.

During the second quarter of fiscal 2025, international tariffs and escalating global trade tensions were cited as primary drivers of a rapid deterioration in the macroeconomic environment. This environment resulted in a significant increase in the discount rate used in financial analyses, reflecting heightened market uncertainty.

This macroeconomic deterioration, partly attributed to tariffs, led to a goodwill impairment charge of $1.4 billion for the Hybrid Cloud reporting unit in the second quarter of fiscal 2025.

Sources

• "Additionally, there continues to be significant uncertainty surrounding the tariff environment and import/export regulations due to numerous factors, including but not limited to tariff imposition delays, changes to tariff rates and policies, and enactment of reciprocally restrictive trade policies and measures around the world. These have enhanced global trade uncertainty and contributed to higher prices of components and end products and services. While we have sought to mitigate these adverse impacts by relying on our global supply chain and implementing pricing measures, we expect such a mixed macroeconomic environment to largely continue and possibly limit revenue and margin growth in the near term." (Form 10-K, TRENDS AND UNCERTAINTIES)

• "During the second quarter of fiscal 2025, the macroeconomic environment experienced a rapid deterioration, primarily driven by the announcement and subsequent modifications of international tariffs, an escalation in global trade tensions, and increasing geopolitical uncertainty." (Form 10-K, April 30, 2025 Interim Impairment Test)

• "The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $1.4 billion. As a result, we recorded a goodwill impairment charge of $1.4 billion in the second quarter of fiscal 2025." (Form 10-K, April 30, 2025 Interim Impairment Test)

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Analysis

During the third quarter of 2025, the company's gross margin rate experienced a 50 basis point negative impact due to tariffs. Despite this, the overall gross margin rate declined by 20 basis points, which was less than the tariff impact, indicating that mitigation efforts partially offset the effect.

The company implemented several mitigation strategies to reduce the tariff impact. These efforts included shared cost negotiations, vendor discounting, and strategically adjusting pricing. These actions performed better than initially expected, leading to a lower-than-anticipated gross margin impact from tariffs for the quarter.

For the 39 weeks ended November 1, 2025, the gross margin rate decreased by 30 basis points compared to the prior year. This decrease was primarily influenced by proactive markdowns aimed at maintaining inventory health, as well as the flow-through of products purchased under the 145% China tariffs.

The company's merchandise inventories increased by 0.7% year-over-year, which was in line with expectations. This increase reflected tariff-related cost increases embedded within the inventory.

Sources

• "Gross margin rate of 39.4% declined 20 basis points. The decline was primarily attributable to a 50 basis point tariff impact, which was better than company expectations reflecting positive response to mitigation actions." (Press Release)

• "The third quarter tariff impact was lower than anticipated, as mitigation actions performed well. This led to a better-than-expected gross margin rate." (Tom Edwards, earnings call)

• "We now estimate a 40 to 50 basis point tariff impact to gross margin, which equates to roughly $0.25-$0.35 of EPS. This is below our prior expectation of 40 to 60 basis points and $0.25-$0.40 of EPS." (Press Release)

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Analysis

During the third quarter of fiscal 2025 and for the 39 weeks ended November 1, 2025, Dollar Tree experienced increased costs associated with tariffs. These higher tariff costs partially offset improvements in the gross profit margin. Specifically, the gross profit margin increase of 40 basis points for the 13 weeks ended November 1, 2025, and 30 basis points for the 39 weeks ended November 1, 2025, was mitigated by these tariff costs, among other factors.

The company actively implemented mitigation strategies to manage the impact of these increased costs. These strategies include renegotiating supplier terms, re-engineering products for efficiency, shifting country of origin where it adds advantage, discontinuing lower-margin or underperforming items, and executing targeted retail price changes. The company noted that the elasticity from pricing actions related to tariff risk was manageable and was offset by the multi-price assortment, which helped maintain the value perception among customers.

Operational expenses were also affected, as tariff-related restickering activities contributed to higher store payroll, which was a significant driver of the increase in selling, general, and administrative expenses. These restickering costs are not expected to recur in fiscal 2026.

Looking ahead, Dollar Tree expects its results to continue to be impacted by higher costs due to the volatility in the tariff environment during the fourth quarter of fiscal 2025. Additionally, the company anticipates ongoing implementation costs for its mitigation strategies before the full benefits of these efforts are realized. For fiscal years 2026 through 2028, the company projects that EPS growth will benefit from the absence of certain discrete cost items, including those tied to tariff mitigation.

Sources

• "Gross profit margin increased during the 13 weeks ended November 1, 2025 due to a 40 basis point decrease in cost of sales... primarily due to improved mark-on from pricing initiatives, lower domestic and import freight costs, and favorable sales mix resulting from increased sales of higher margin discretionary merchandise as a percentage of net sales, partially offset by higher tariff costs, higher markdowns, and higher shrink costs resulting from unfavorable inventory results." (Filing)

• "During fiscal 2025, we have experienced increased costs associated with the tariff environment and implementation of our mitigation strategies, including discrete price-change costs. We expect our results to continue to be impacted by near-term challenges, including higher costs due to the volatility in the tariff environment, in the fourth quarter of fiscal 2025." (Filing)

• "EPS is expected to grow by a high-teens percentage in fiscal year 2026 due to the timing of certain discrete cost benefits, increased by the absence of recent discrete cost items tied to tariff mitigation, multi-price store conversions, lost distribution capacity, and the sale of Family Dollar." (Investor Day Press Release)

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Analysis

The company acknowledged that changes in U.S. trade policy and the imposition of tariffs on imported goods from various countries have had an ongoing impact on its inventory costs. Management continues to monitor these trade policies to assess their effects.

To mitigate the ongoing impacts of tariffs, the company is evaluating several strategic adjustments. These include changes to its merchandise assortment, pricing strategies, and global supply chain operations. A specific mitigating action being considered is the continued diversification of country of origin for its products.

Sources

• "During the year, the United States has enacted significant changes to its trade policy and imposed tariffs on imported goods from a number of countries." (Filing)

• "The Company has been, and continues to, monitor these trade policies and their ongoing impacts on the cost of our inventory." (Filing)

• "We will also continue to evaluate adjustments to our merchandise assortment, pricing, and global supply chain strategies, including continued country of origin diversification, as potential mitigating actions." (Filing)

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Analysis

John Deere's financial results were impacted by tariffs in fiscal year 2025, with effects continuing into the guidance for fiscal year 2026. For fiscal year 2025, operating margins were reduced by approximately 1.5 percentage points due to tariffs. In the fourth quarter of 2025, direct tariff expense negatively impacted equipment operations margins by more than 3 percentage points. Production costs for the full year 2025 were unfavorable when tariff impacts were included.

The company projects a pre-tax direct tariff expense of $1.2 billion for fiscal year 2026. This represents an incremental increase of $600 million compared to the $600 million expense incurred in fiscal year 2025. The forecast also includes additional inflationary pressures resulting from the indirect impacts of tariffs. The quarterly run rate for tariffs in fiscal year 2026 is anticipated to be approximately $300 million.

Tariffs are expected to specifically affect segment performance. For the Production & Precision Ag segment, tariffs are projected to impact operating margins by about 1.5 percentage points for the full year 2026. Similarly, operating margins for the Construction & Forestry segment are expected to be tempered by incremental tariff expense. The company aims to mitigate these increased costs through continued price realization and ongoing cost reduction initiatives across its operations.

Sources

• "Full-year operating margins came in at 12.6%, and we delivered over $5 billion in net income, financial performance that represents our best results yet at this point in the cycle. Our teams continue to manage this downturn effectively by focusing on what we can control. We believe the progress we have made throughout this past fiscal year positions us well as we enter fiscal year 2026." (Company - CEO)

• "Included in this estimate is projected pre-tax direct tariff expense of approximately $1.2 billion, with additional inflationary pressures also contemplated from the indirect impacts of tariffs." (Company - Other Officer)

• "Turning to cost, direct tariff expense negatively impacted equipment operations margins in the quarter by more than 3%." (Company - Other Officer)

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Analysis

Tariffs imposed since April 2025 led to increased costs for the company during fiscal year 2025. These higher commodity and tariff costs, alongside other factors, contributed to a decrease in the company's gross margin. Both the Personal Systems and Printing segments experienced reduced gross margins partially due to these increased tariff costs.

The company's operating profits for fiscal year 2025 also declined as trade-related costs took several quarters to be absorbed.

To address the evolving tariff environment, HP is implementing mitigating actions. These include evaluating and executing supply chain resiliency movements, as well as cost and pricing measures.

Sources

• "Since April 2025, new, substantial tariffs have been imposed on imports to the United States. We continue to evaluate and implement further mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the tariff environment evolves. During fiscal year 2025, we experienced higher commodity and tariff costs, which were not fully mitigated by pricing and other actions enacted during the period." (Management's Discussion and Analysis of Financial Condition and Results of Operations)

• "In fiscal year 2025, gross margin decreased by 1.5 percentage points primarily driven by products gross margin due to higher commodity and tariff costs, mix shifts towards Personal Systems and unfavorable currency impacts, partially offset by disciplined pricing actions and cost savings including Future Ready transformation savings." (Management's Discussion and Analysis of Financial Condition and Results of Operations)

• "Operating profits declined as trade-related costs during the year took a few quarters to be absorbed." (Company - CEO)

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Analysis

The company recognized that trade protection measures, including tariffs, imposed or proposed by various countries during the first nine months of Fiscal 2026, could affect its results of operations in some markets. This acknowledgment highlights tariffs as a macroeconomic risk and uncertainty.

To address the potential impact of these tariffs, the company stated it leverages the agility and scale of its supply chain. This approach aims to mitigate the effects of trade protection measures and allows the company to respond to changing market conditions as necessary.

Sources

• "During the first nine months of Fiscal 2026, a number of countries, including the United States, imposed or proposed tariffs on imports, and may continue to do so. The impacts of trade protection measures, including increases or changes in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility, and global macroeconomic conditions, or uncertainty regarding the impact of proposed or future trade protection measures, may affect our results of operations in some markets." (Filing)

• "We continue to leverage the agility and scale of our world-class supply chain to mitigate impacts of tariffs and will continue to respond to changing market conditions as needed." (Filing)

• "Those lessons learned from the COVID time and most recently what happened with tariffs, I think, show that we can operate with the right sense of urgency." (Jeff Clarke)

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Analysis

US tariffs on hospital products originating from New Zealand affected the company's gross margins by 32 basis points during the first half of the current financial year. The company views tariffs as a standard business cost, integrating them into ongoing operational management.

Management indicated that its efforts to improve manufacturing efficiency and implement continuous improvement projects are intended to offset the tariff impacts. These initiatives are expected to lead to an overall gross margin improvement of approximately 50 basis points for the full FY2026.

For the full FY2026, tariffs are expected to impact gross margin by approximately 75 basis points. If the current global tariffs persist, the annualized impact on gross margin is estimated to be approximately 130 basis points. The company focuses its efforts on improving clinical practice and patient outcomes rather than primarily managing tariff implications.

Looking ahead to FY2027, an additional 65 basis points of tariff impact on gross margin is anticipated, building on the FY2026 figures.

Sources

• "US tariffs on hospital products sourced from New Zealand impacted our gross margins by 32 basis points in this half." (Lyndal York)

• "If the current global tariffs remain in effect as they currently are, our gross margin would be impacted by approximately 130 basis points on an annualized basis, with approximately 75 basis points impacting in the 2026 full financial year." (Lyndal York)

• "You're right. The 65 basis points, anywhere from 100 to 150 basis points on average a year, we try to do as underlying improvements." (Lyndal York)

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Analysis

During Fiscal 2025, new universal baseline tariffs were announced by the U.S. on all imports, including from countries where the company sources a significant portion of its merchandise. This has led to retaliatory tariffs from certain countries and has increased the cost of merchandise, contributing to overall economic uncertainty.

In response, the company is implementing various mitigation strategies. These include evaluating changes to its supply chain footprint, negotiating with supply chain vendors, and pursuing operating expense reductions. The company also aims to increase its average unit retail (AUR) through lower promotions, less clearance selling, and targeted ticket increases, which are planned to begin post-holiday.

The adverse tariff impact on cost of sales for the third quarter of Fiscal 2025 was approximately 210 basis points as a percentage of net sales. For the year-to-date period of Fiscal 2025, this impact was approximately 90 basis points on cost of sales. These tariff-related costs are noted as a factor in the decline of operating margin.

For the full Fiscal 2025, the company expects to incur approximately $90 million in net tariff expense, which is projected to negatively impact operating profit by 170 basis points as a percent of net sales. The fourth quarter of Fiscal 2025 is specifically expected to see a $60 million tariff impact, representing approximately 360 basis points, net of planned mitigation efforts.

Sources

• "During Fiscal 2025, the U.S. announced a new universal baseline tariff on all U.S. imports, plus additional country-specific tariffs for select countries, including the countries from which we source a predominant portion of our merchandise." (Filing)

• "For the third quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 260 basis points, as compared to the third quarter of Fiscal 2024. The percentage increase was primarily attributable to higher average unit cost ("AUC") partially due to an approximate 210 basis point adverse tariff impact, with the remaining impact from product mix compared to the third quarter of Fiscal 2024." (Filing)

• "Assuming the estimated impact from the tariffs on goods imported into the U.S. based on trade policies in effect as of November 21, 2025, and factoring in certain planned mitigation strategies, we expect to incur approximately $90 million of net tariff expense, or 170 basis points as a percent of net sales, which will correspondingly negatively impact our operating profit in Fiscal 2025." (Filing)

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Analysis

The company recognizes tariffs as a component of the dynamic macroeconomic environment, which contributes to fluctuations in product costs and availability. These changes in international trade policies also carry the potential to influence pricing strategies, consumer discretionary spending, and the overall promotional environment.

For the third quarter of 2025, the company stated that the impact of tariffs was integrated within its merchandising margin for the DICK'S Business. Despite these influences, the DICK'S Business reported a 27 basis point expansion in gross margin, with merchandise margins increasing by five basis points, indicating that the business managed to absorb or offset tariff-related costs.

The updated full-year 2025 guidance for the DICK'S Business explicitly includes the expected impact from all tariffs currently in effect. The company raised its guidance for comparable sales growth and adjusted EPS for the DICK'S Business, suggesting that the projected effects of tariffs have been incorporated into these positive outlooks.

Sources

• "Fluctuations in product costs and availability due to tariffs, currency exchange rate fluctuations, inflationary pressures, fuel price uncertainty, supply chain constraints, increases in commodity prices, labor shortages and other factors;" (Filing)

• "Our updated guidance reflects our strong Q3 performance and includes the expected impact from all tariffs currently in effect." (Navdeep Gupta)

• "The tariff impact was within that quarter, our results as well within the merchandising margin." (Navdeep Gupta)

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Analysis

The company acknowledged that tariffs influenced fiscal year 2025 business volumes. Management observed some upside in business volumes during the year, which was attributed to tariff and policy-related factors, potentially indicating pull-ins. This strength was noted particularly in the automotive market, where volumes proved more resilient than expected, and initial estimations of pre-buying unwinding in the fourth quarter did not materialize.

Despite the observed strength, the company remains cautious regarding the future impact of tariffs. The outlook for the automotive market in the first quarter of fiscal year 2026 includes an expectation for a sequential decline, partly due to ongoing risks associated with tariffs and the broader macroeconomic environment. The long-term impact of these tariffs on the company and its customers remains unclear, contributing to a cautious market view. The company indicated its confidence in overall growth for fiscal year 2026, even while acknowledging continued impacts from tariffs and trade uncertainty.

Sources

• "We do think some of the upside we've seen in the volumes in our business this year was tariff and policy-related. We've talked in prior calls about our view that there might have been some pull-ins." (Richard Puccio, Earnings Call)

• "We are still being a bit cautious on the market as it is unclear how the tariffs and volatilities we saw will ultimately impact us and our customers." (Richard Puccio, Earnings Call)

• "While we're mindful of the macro environment and the continued impacts of tariffs and trade uncertainty, we remain confident in our growth in fiscal year 2026 and beyond..." (Vincent Roche, Earnings Call)

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Analysis

The company reported that tariff headwinds negatively impacted its financial performance in the fourth quarter of fiscal year 2025. Gross margins experienced a 100 basis point year-over-year decline directly attributable to tariffs. Operating margins were also affected, decreasing slightly year-over-year due to these same pressures.

To address the effects of global tariff changes, Agilent established a dedicated cross-functional tariff task force. This initiative, part of the broader Ignite operating system, focused on developing and implementing a coordinated strategy to accelerate tariff mitigation efforts.

Looking ahead to fiscal year 2026, the company expects to fully mitigate the impact of existing tariffs. This mitigation is planned to be achieved through a combination of cost savings and strategic pricing actions. While the fiscal year 2026 operating margin expansion target of 75 basis points includes absorbing incremental material costs from tariffs, the overall guidance reflects the expectation of full mitigation.

Despite the planned full mitigation over the fiscal year, the impact of tariffs on the profit and loss statement is expected to cause earnings to be somewhat weighted towards the second half of fiscal year 2026. Additionally, the company noted that a stabilizing tariff environment is a factor contributing to positive trends observed in the pharma market.

Sources

• "The cross-functional task force rapidly developed a unified strategy and executed a suite of interconnected projects that greatly accelerated our tariff mitigation efforts. As a result, we are highly confident that we will fully mitigate current tariffs in FY26." (Company - CEO)

• "On a year-over-year basis, they were down 100 basis points due to tariff headwinds." (Company - Other Officer)

• "This guidance also incorporates achieving full mitigation of existing tariffs over the course of the year, using cost savings and pricing actions." (Company - Other Officer)

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Analysis

Tariffs are identified as one of several macroeconomic factors contributing to uncertainty in demand for the company's subscription platform. The company notes that intensifying trade tensions, which include tariffs, have impacted the macroeconomic environment. The company monitors these circumstances, but the long-term implications of such macroeconomic conditions on its business and financial results remain uncertain. Tariffs are also listed as a factor that may affect cash from operations. The company did not quantify any specific financial impact from tariffs in the current period.

Sources

• "The macroeconomic environment, including geopolitical conflicts, inflationary pressures, government shutdowns, tariffs escalating trade tensions, and the global market and foreign currency exchange rate volatility, continues to create uncertainty in demand for subscriptions to our open work platform." (Filing)

• "In recent months, intensifying trade tensions and global market volatility as well as ongoing foreign currency fluctuations have impacted the macroeconomic environment. We continue to monitor the potential effects of these circumstances as well as the overall global economy and geopolitical landscape on our business and financial results. The implications of macroeconomic conditions on our business, results of operations, and overall financial position, particularly in the long term, remain uncertain." (Filing)

• "Cash from operations may also be affected by various risks and uncertainties, including, but not limited to, macroeconomic factors, such as geopolitical conflicts, tariffs and trade tensions, inflationary pressures, interest rate fluctuations, and the fluctuations in foreign currency exchange rates." (Filing)

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Analysis

Walmart expects ongoing uncertainty in its business and the global economy due to tariffs and trade restrictions. Less than one-third of products sold in the U.S. are imported, with primary import sources including China, Mexico, Vietnam, India, and Canada.

The company has implemented various strategies to mitigate the impact of increased costs, including those from tariffs. These strategies involve disciplined inventory management, managing price gaps, and optimizing business mix. This approach has allowed the company to navigate cost pressures effectively.

Management noted that the impact of tariffs has been less significant than initially expected at the beginning of the year. Some relief in key food categories has contributed to this reduced impact. The company has actively managed inventory levels to reduce markdown risks, which helps offset cost increases.

Sources

• "We expect continued uncertainty in our business and the global economy due to tariffs and trade restrictions;" (Overview, 10-Q)

• "Inventory levels increased approximately 3% for the total company, with Walmart US inventory up 2.6% despite higher costs from tariffs." (John David Rainey, context earnings call)

• "I'm really impressed with how the team has managed through tariffs this year. If you look at it holistically, the job they've done to manage inventory, to manage price gaps, to improve our mix with categories like fashion being so strong, that combined with the business mix shifts in the company have enabled us to get through this year and become even stronger as we've done it." (Doug McMillon, context earnings call)

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Analysis

The company incurred a $4.5 billion charge in the first quarter of fiscal year 2026 related to H20 excess inventory and purchase obligations, following U.S. government requirements for export licenses to the China market. This diminished demand for H20 products.

In the third quarter of fiscal year 2026, the company generated approximately $50 million in H20 revenue under the licenses granted by the U.S. government. However, overall data center compute revenue from China was impacted by geopolitical issues, leading to unmet purchase orders. The company maintains its commitment to engagement with the U.S. and China governments, advocating for its ability to compete globally.

The rapid evolution of global trade policies, including export controls and tariffs, has introduced complexity and increased costs throughout the company's supply chain. This ongoing uncertainty can adversely affect investment decisions, disrupt supply chain operations, and impact the timing and volume of customer purchases due to challenges in forecasting costs and demand.

Looking forward, the U.S. government has expressed an expectation to receive 15% or more of the revenue generated from licensed sales. This requirement has not yet been codified. For the fourth quarter of fiscal year 2026, the company's guidance does not assume any data center compute revenue from China, indicating a continued impact from export controls.

Sources

• "In April 2025, the U.S. government, or USG, informed us that a license is required for exports of our H20 product into the China market. As a result of these new requirements, we incurred a $4.5 billion charge in the first quarter of fiscal year 2026 associated with H20 for excess inventory and purchase obligations, as the demand for H20 diminished. In August 2025, the USG granted licenses that would allow us to ship certain H20 products to certain China-based customers, but to date, we have generated approximately $50 million in H20 revenue under those licenses." (Filing)

• "Sizable purchase orders never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China." (Colette Kress, Executive Vice President and Chief Financial Officer)

• "The rapid evolution of global trade policies, such as export controls and tariffs, has added complexity and increased costs throughout our supply chain, and these challenges are likely to persist. Ongoing uncertainty regarding the scope and application of such measures may adversely affect investment decisions by us and our partners, disrupt supply chain operations, and impact the timing and volume of customer purchases due to challenges in forecasting future costs and demand." (Filing)

• "USG officials have expressed an expectation that the USG will receive 15% or more of the revenue generated from licensed sales of our products, but to date, the USG has not published a regulation codifying such requirement." (Filing)

• "Consistent with last quarter, we are not assuming any data center compute revenue from China." (Colette Kress, Executive Vice President and Chief Financial Officer)

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Analysis

Tariffs on imports from China and other countries have created significant volatility in the global economy. TJX continues to monitor these changes, including international trade relations, economic and monetary policies, legislation, and regulations related to tariffs.

The company has employed mitigation strategies to offset tariff pressures. A key factor in this success is its buying organization's merchandise sourcing model. TJX is implementing and considering additional measures to further mitigate tariff impacts.

Despite these efforts, uncertainty persists regarding the tariffs' extent and duration. The potential impacts include effects on general economic conditions, direct and indirect imports, vendor and competitor pricing, consumer demand, tariff pass-throughs, and reciprocal or retaliatory tariffs. Actions taken to adapt could increase risk, lead to costly or time-consuming operational modifications, or impact pricing on certain items.

Sources

• "We continue to closely monitor changes in international trade relations, economic and monetary policies, and legislation and regulations including those related to tariffs on imports from China and other countries." (Filing)

• "While we have been, and believe we can continue to be, successful in mitigating tariff pressures, tariffs have led to significant volatility in the global economy." (Filing)

• "Importantly, we are very pleased with our mitigation strategies, which allowed us to offset all the tariff pressure we saw in the third quarter." (John (Company Officer))

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Analysis

Tariffs represent an ongoing pressure that Lowe's is actively managing. During the third quarter of 2025, higher tariffs contributed to inventory valuation, even though the company reported an overall net decrease in inventory. The company implemented modest price increases to account for tariffs as these costs moved through the system.

The gross margin increase in the third quarter was not primarily driven by pricing adjustments or tariffs. This outcome aligns with the company's expectations regarding the flow of these costs through its margins. Looking ahead, tariffs are projected to intensify through the fourth quarter of 2025 and to impact the first half of 2026. The company is evaluating how these ramping tariffs will affect future sales margin and operating margin.

Sources

• "managing the tariff pressure that we've been dealing with." (Brandon Sink)

• "Inventory ended Q3 at $17.2 billion, down approximately $400 million versus prior year. This net decrease also reflects the inclusion of inventory from recent acquisitions of approximately $600 million and higher tariffs." (Brandon Sink)

• "The last thing I'll mention, just as we continue to look at tariffs, those ramp here in Q3, we're expecting that also to continue ramping in Q4 and the wrap to affect the first half of the year. Managing through that and trying to understand how that impacts both sales margin and operating margin going forward." (Brandon Sink)

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Analysis

The U.S. imposed a range of tariffs on products from foreign countries in April 2025. Approximately one-half of the company's merchandise is sourced from outside the U.S., with China identified as the single largest source. The company is actively monitoring the evolving regulatory landscape and adjusting its plans as necessary. The management team has worked to mitigate the impact of these tariffs.

The company has not quantified a specific financial impact from these tariffs on its current period sales, costs, or profitability. While tariffs are mentioned as a factor in the overall business environment, their specific, isolated financial effect was not detailed. The company has indicated that the combined effect of tariffs, along with sourcing strategies, pricing actions, consumer responses, and other factors, could materially impact sales and results of operations in future periods.

Sources

• "In April 2025, the U.S. imposed a range of tariffs on the vast majority of products manufactured in foreign countries and jurisdictions, and subsequently imposed incremental tariffs, paused, modified, or issued specific exceptions to recently imposed tariffs. Approximately one-half of the merchandise we offer is sourced from outside the U.S., either directly or through our vendors, with China as the single largest source of merchandise we import." (Filing)

• "We are closely monitoring the evolving consumer and regulatory landscape and adjusting plans as needed. The collective interaction of tariffs, sourcing strategies, pricing actions, consumer response and behaviors, and other factors, could materially impact our sales and results of operations in future periods." (Filing)

• "Against the backdrop of a very difficult environment, I am proud of the team's hard work this year to navigate a very high level of complexity, including their work to mitigate the impact of tariffs and navigate challenging consumer conditions." (Jim Lee)

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Analysis

Tariffs increased duties on imported goods, partially offsetting favorable currency impacts and changes in Italian payback accruals in the cost of products sold for the three and six months ended October 24, 2025. This resulted in a 20 basis points headwind to adjusted gross margin in the second fiscal quarter.

For fiscal year 2026, the company estimates a pre-tax net tariff impact of $185 million. The majority of this impact is expected to be recognized in the second half of the fiscal year, with approximately $90 million to $95 million specifically anticipated in the third fiscal quarter. This total tariff impact is projected to contribute to a roughly 40 basis points decrease in fiscal year 2026 gross margin and a 50 basis points decrease in operating margin.

Medtronic is implementing proactive steps to mitigate these tariff effects. The company indicates that its fiscal year 2026 diluted non-GAAP EPS guidance already accounts for this potential tariff impact.

Sources

• "Based on current rates as of November 18, 2025, we estimate the pre-tax net tariff impact to be $185 million in fiscal year 2026, with the majority recognized in the consolidated statements of income in the second half of the fiscal year." (Filing)

• "Next, tariffs were a 20 basis points headwind..." (Thierry Piéton, Vice President and Chief Financial Officer)

• "We anticipate a tariff impact to COGS of approximately $185mn, including $90-$95 million in the third quarter. Including tariffs, we expect a fiscal 2026 gross margin decrease of roughly 40 basis points." (Thierry Piéton, Chief Financial Officer)

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Analysis

The Home Depot implemented moderate price adjustments following policy changes related to tariffs. The objective of these price adjustments was to protect customer projects. The company noted it was too early to fully assess the elasticity of these price changes. More than 50% of the company's inventory is not subject to tariffs and is sourced domestically, which limits the overall exposure to tariff impacts.

Sources

• "As I mentioned in our Q2 call, after some policy changes were made around tariffs, that we would take some moderate price moves with the entire strategy to make sure we protected the project." (Billy Bastek)

• "It bears also to point out that over 50% of our inventory is not part of tariffs and is obviously sourced domestically." (Billy Bastek)

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Analysis

The company experienced an initial impact from additional US duties in the first half of the current fiscal year. This impact was limited to EUR 50 million due to proactive inventory management and the phased implementation of different tariff rates, starting at 10%, then 15% for Europe-made products, and 39% for Swiss-made products.

The Jewellery Maisons and specialist watchmakers were affected, with US duties contributing to gross margin pressure alongside unfavorable foreign exchange movements and rising raw material costs. Price adjustments were implemented to mitigate these headwinds.

A greater unfavorable impact from US tariffs is anticipated in the second half of the fiscal year, particularly if the 39% tariffs on Swiss-origin products remain in effect. The estimated total adverse impact from increased US tariff rates for the full current fiscal year is around EUR 300 million.

Additionally, the company noted that European tariffs, specifically a 15% rate, represent the largest overall tariff impact. These tariffs affect products manufactured in the EU, including jewelry, fashion, accessory items, and one watch brand. The costs associated with these European tariffs are recycled into the income statement as inventory is sold.

Sources

• "In the first half, the impact of increased US tariff rates was limited to some EUR 50 million, thanks to our proactive inventory management since April and due to the phasing of the implementation of different tariff rates, starting with 10%, then 15% for Europe-made products, followed by 39% in August for Swiss-made products." (Burkhart Grund, CFO)

• "With this phasing in mind, we anticipate a greater unfavorable impact in the second half, particularly if the 39% tariffs on Swiss origin products are maintained. Based on the current levels of our US inventories and planned shipments, we estimate the full adverse impact of the increased US tariff rates to be around EUR 300 million for the full current fiscal year." (Burkhart Grund, CFO)

• "Let's not forget that the biggest impact of tariffs comes from the European tariffs, which is, as you know, 15% because we produce a significant amount of jewelry, fashion, and accessory items, and one watch brand as well in the European Union or inside the European Union." (Burkhart Grund, CFO)

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Analysis

Applied Materials' growth rate for fiscal year 2025 was constrained by increased trade restrictions and an unfavorable market mix. Trade rule changes over the past twelve months have reduced the company's accessible market in China.

The impact of these restrictions significantly affected the company's access to the market in China. In fiscal year 2024, restrictions were equivalent to approximately 10% of the China wafer fab equipment (WFE) market, primarily in leading-edge logic and the domestic NAND market. By fiscal year 2025, this impact had more than doubled to well over 20% of the China WFE market, extending to China's DRAM market and some of the ICAPS market. Non-U.S. equipment companies do not face the same restrictions, allowing restricted customers to purchase from them.

Despite the overall market share loss in China due to these inaccessible segments, the company asserts that it is competing effectively and maintaining market share in the areas where it can operate. To mitigate the impact, the company plans to introduce new ICAPS products for both China and non-China markets, aiming to increase its addressable market opportunity.

Looking ahead to fiscal year 2026, the company expects wafer fab equipment spending in China to be lower, and it does not anticipate significant new restrictions. The long-term expectation is that the China ICAPS market, which has seen elevated spending for self-sustainability, will revert to approximately one-third of the total WFE market.

Sources

• "Looking back at fiscal 2025, while it was a growth year for Applied, our growth rate was tempered due to increased trade restrictions and an unfavorable market mix. Over the past 12 months, multiple trade rule changes have reduced the size of our accessible market in China." (Gary Dickerson, context earnings call)

• "Semiconductor systems revenue was up 4%, growing even as the impact of trade restrictions significantly reduced our access to the market in China. The impact of these restrictions was equivalent to around 10% of the China market in fiscal 2024 and more than double that amount in fiscal 2025." (Bryce Hill, context earnings call)

• "We had shared that $110mn would be affected in our Q4. We did not ship that in Q4, but we will ship that in Q1. The first answer is that is included in our guide for Q1. The $600mn is still a good estimate for what is in the rest of 2026." (Bryce Hill, context earnings call)

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Analysis

Siemens identifies new tariffs and protectionism as components of a challenging global environment. The company's strategy involves leveraging its broad geographic footprint to strengthen resilience against these trade restrictions.

This global and local presence enables Siemens to buffer the impact of tariffs. The company asserts that this capability provides a competitive advantage compared to many competitors.

In response to potential trade barriers, particularly in China, Siemens is pursuing strategies that include local development and sourcing, such as using local silicon. This approach is intended to comply with regulations and maintain market presence.

A specific restriction related to EDA software for smaller nodes was noted. This issue was resolved within a three-week period. The company also indicated a willingness to adapt software platforms if future circumstances require it.

Sources

• "This broad geographic footprint strengthens Siemens’ resilience against tariffs and trade restrictions, providing a competitive advantage that supports above-market growth." (Press Release)

• "When tariffs or trade restrictions come up, we can buffer their impact for us. Most of our competitors cannot." (CEO)

• "The only restrictions which we see so far, and you could read it also in newspapers, is EDA software. Therein, it is not the whole EDA package. It's the package which is geared for the smaller nodes, so 53 nanometers, which there's a restriction. It was resolved quickly after, and this is the arm wrestling." (CEO)

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Analysis

Cisco acknowledges its exposure to tariffs and other trade policies. While the full extent of this exposure remains uncertain, it could be significant if not mitigated. The company's guidance for the second quarter and the full fiscal year 2026 incorporates the estimated impact of tariffs, assuming that current tariffs and exemptions persist through the end of fiscal year 2026. A specific change noted for future guidance is the reduction of the China fentanyl tariff from 20% to 10%.

Despite the presence of tariffs, the company has not provided specific quantified financial impacts on its current period's results, such as revenue, net income, or gross margins. The reported product gross margin decrease in the first quarter of fiscal year 2026 was primarily attributed to product mix and pricing, rather than tariffs. The company's commentary suggests that tariff considerations are integrated into its overall financial planning and guidance.

Sources

• "Additionally, while we are exposed to new and proposed tariffs and other trade policies, the extent of such exposure is uncertain but could be significant if the exposure remains and we are unable to mitigate it." (Filing)

• "Turning to guidance, please note our Q2 and fiscal year 2026 guide assumes current tariffs and exemptions remain in place through the end of fiscal 2026. These assumptions remain unchanged from our prior guidance, with the exception of the China fentanyl tariff being reduced from 20% to 10%." (Mark Patterson (CFO))

• "Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy." (Press Release)

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Analysis

The company was impacted by U.S. trade policy announcements and tariffs, which led to a divergence in copper prices between the COMEX and LME markets. The average COMEX copper settlement price was 9% higher than the average LME copper settlement price during third-quarter 2025. Tariffs imposed effective August 1, 2025, targeted U.S. imports of semi-finished copper products and copper-intensive derivative products. Refined copper, concentrates, and scrap, which are key products for the company, were exempted from these specific tariffs.

The company's third-quarter 2025 costs were not significantly impacted by U.S. tariffs. However, the company is monitoring the potential pass-through of tariff-related costs from suppliers, estimating a possible increase of approximately 5% in the cost of goods purchased in the U.S. The company is evaluating alternative sourcing options to mitigate these potential cost increases.

Looking forward, the U.S. government plans to reassess the potential for future tariffs on refined copper. These could be 15% starting in January 2027 and rising to 30% in 2028. Additionally, a directive mandates that 25% of U.S.-produced copper cathode and concentrate be sold domestically in 2027, with potential increases to 30% in 2028 and 40% in 2029. The company is well-positioned in the U.S. as a leading copper supplier, providing approximately 70% of total U.S. refined copper production.

Sources

• "Our third-quarter 2025 costs were not significantly impacted by U.S. tariffs, and we are continuing to monitor impacts on our business, cost structure and supply chains associated with tariffs on U.S. imports." (Filing)

• "Effective August 1, 2025, a 50% tariff was imposed under Section 232 of the Trade Expansion Act, targeting U.S. imports of semi-finished copper products and copper-intensive derivative products. However, refined copper, including cathodes, concentrates and scrap, was exempted from the tariff and the U.S. government has indicated it will reassess by mid-2026 the potential for a refined copper tariff of 15% beginning in January 2027 and rising to 30% in 2028." (Filing)

• "Differences between COMEX and LME copper prices were present during third-quarter 2025, with the average COMEX copper settlement price 9% higher than the average LME copper settlement price." (Filing)

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Analysis

The company reported isolated and de minimis impacts from tariffs during the third quarter of 2025. These impacts were specifically noted within its buy now, pay later (BNPL) business.

Despite these tariff-related impacts and certain de minimis tax exemption changes, the BNPL gross merchandise volume (GMV) demonstrated robust growth. The BNPL GMV grew 17% or 18% year over year on a constant currency basis in the third quarter.

Sources

• "We saw only isolated impacts from tariffs and sort of the de minimis tax exemption changes that appeared in our buy now pay later business." (Amrita Ahuja, Company - CEO)

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Analysis

Tariffs primarily on non-casing steel products have affected EOG Resources' service costs. This impact has largely counteracted the low single-digit reduction observed in spot rates for high-spec equipment. The tariffs mitigated the potential cost savings the company would have realized from decreased service costs.

Sources

• "We have just recently started seeing a low single digit reduction in spot rates for high-spec equipment, but this has largely been offset by the impact from tariffs primarily on non-casing steel products." (Company - Other Officer)

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Analysis

Microchip identified tariffs as a factor contributing to a softer overall business environment. The company noted that tariffs had an impact on customer sentiment, leading to uncertainty regarding capital investments and causing customers to delay spending. This, combined with other market conditions, influenced the company's guidance for the December quarter.

In its regulatory filing, Microchip listed the impact of national security protections, trade restrictions, and changes in tariffs, including those affecting China, as risk factors. The company also mentioned tariffs as a source of uncertainty that could affect the availability of financing on acceptable terms.

Sources

• "But number one, the overall softer tone in the business environment, and number two, some impact of tariffs on customer psyche, and people don't know when to make capital investments or not, and people are holding back." (Company - CEO)

• "The impact of national security protections, trade restrictions and changes in tariffs, including those impacting China;" (Filing)

• "There can be no assurance that any financing will be available on acceptable terms due to uncertainties resulting from tariffs, high interest rates, high inflation, economic uncertainty, instability in the banking sector, public health concerns, or other factors, and any additional equity financing or convertible debt financing would result in incremental ownership dilution to our existing stockholders." (Filing)

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Analysis

AstraZeneca reached a landmark agreement with the U.S. government that includes a three-year exemption from tariffs. This agreement provides clarity around pricing and effectively prevents any direct tariff impact on the company's operations for the specified period. Management indicated confidence in absorbing the overall impact of this agreement, which also covers other aspects beyond tariffs, and stated it would not affect their 2030 ambition or midterm goals.

The three-year exemption specifically addresses potential tariff-related costs, thereby mitigating a significant financial risk. This arrangement allows the company to continue its U.S. operations without the added burden of tariffs for the duration of the agreement.

Sources

• "We announced a landmark agreement with the U.S. government, which provides greater clarity around pricing and a three-year exemption from tariffs." (Company - CEO)

• "We think we can absorb the impact of this agreement. We're confident we can absorb it in 2026 and beyond. It really doesn't affect our 2030 ambition and doesn't affect our midterm ambition." (Company - CEO)

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Analysis

The company actively monitors global trade policies, including tariffs, and manages their impact through cost and pricing measures. Tariffs are identified as a factor that may contribute to supply chain disruptions and affect market conditions, including sales and pricing. The company has implemented pricing adjustments to recover costs associated with tariffs, stating that these adjustments are for cost recovery, not margin expansion. There is continued uncertainty related to tariffs within the Asia-Pacific region, impacting the industrial international businesses.

Sources

• "We actively monitor global trade policies and inflation, managing their impact through a variety of cost and pricing measures." (Filing)

• "supply chain and labor disruptions, including as a result of tariffs and labor shortages" (Filing)

• "I think there is still some continued uncertainty from tariffs across this market." (Jenny Parmentier)

• "As I've stated time and time again, we can't use tariffs as a margin expansion device. This is something that we have to recover from a cost standpoint. We'll adjust as we need to going forward." (Jenny Parmentier)

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Analysis

Tariffs have had a minor impact on ConocoPhillips' operations. The company specifically noted that tariffs contributed a low single-digit percentage to the increase in the Willow project's capital estimate. The primary drivers for the overall increase in the Willow project's capital estimate were general labor and equipment inflation, as well as localized cost escalation on the North Slope. Efforts to mitigate total project risk and ensure schedule adherence also contributed to the increased costs. The company generally monitors tariffs as part of its assessment of market fundamentals and external factors that could affect its business environment. However, no other specific or material company-wide financial impacts from tariffs were detailed.

Despite the cost pressures at Willow, the project schedule was maintained, with first oil now narrowed to early 2029. The company also implemented mitigating strategies across its portfolio to address various cost increases, which are reflected in its financial outlook.

Sources

• "We're often asked about tariffs. We have seen some impacts on tariffs, but albeit, it's really been low single-digit % as a total of the increase we're seeing on that project." (Company - Other Officer)

• "The increase is primarily due to higher general labor and equipment inflation and increased inflation on North Slope construction." (Company - Other Officer)

• "We continually monitor market fundamentals, including the impacts associated with geopolitical tensions and conflicts, global demand for our products, oil and gas inventory levels, governmental policies, tariffs, inflation and supply chain disruptions." (Filing)

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Analysis

Tariffs adversely affected Becton, Dickinson and Company's financial performance in fiscal year 2025 and are expected to continue impacting results in fiscal year 2026.

For fiscal year 2025, tariffs partially offset improvements in gross profit margins across the Medical, Life Sciences, and Interventional segments. The company's adjusted operating margin for FY2025 absorbed a 40 basis point impact due to tariffs. Adjusted diluted EPS growth for FY2025 experienced a 2-point headwind.

Looking ahead to fiscal year 2026, the company expects an incremental $185M headwind on operating expense due to tariffs, which translates to an 80 basis point year-over-year impact on adjusted operating margin. This incremental impact is anticipated to be most significant in the first quarter and continue through the third quarter of fiscal year 2026.

Mitigation strategies employed by the company include sourcing optimization and seeking tariff exemptions for qualifying products. However, the company acknowledges uncertainty regarding the timing and effectiveness of these efforts, noting that mitigation strategies may be challenged, rejected, or otherwise ineffective.

Sources

• "For the full year, adjusted gross margin of 54.7% and adjusted operating margin of 25% increased by 140 and 80 basis points year-over-year, respectively, inclusive of absorbing about a 40 basis point impact from tariffs." (Company - CFO)

• "We delivered adjusted diluted EPS of $14.4, which represents strong growth of 9.6%, including a two-point tariff headwind." (Company - CFO)

• "Moving down the P&L, we expect continued strong adjusted operating margin consistent with fiscal year 2025 of about 25%. This includes absorbing an incremental $185 million, or 80 basis points year-over-year headwind from tariffs, in line with what we've previously communicated." (Company - CEO)

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Analysis

During the first quarter of fiscal year 2026, Diageo's U.S. spirits organic net sales were influenced by a pull forward of imports related to tariffs on European imports. This timing effect provided some benefit to net sales in the quarter, though a portion of it unwound within the same period, making the net impact on Q1 unquantified.

Diageo maintains its guidance for the expected impact of tariffs into the U.S. from UK and European imports at approximately $200M on an annualised, pre-mitigation basis. This guidance assumes current tariff rates of 10% on UK imports and 15% on European imports remain in effect, with Mexican and Canadian spirits imports continuing to be exempt under USMCA.

The company expects to mitigate about half of this ongoing annual impact on operating profit through various actions, which are implemented before considering any pricing adjustments. This mitigation strategy aims to reduce the net financial burden from tariffs.

Sources

• "US Spirits organic net sales were down 4.1%. Overall net sales were impacted by lapping tough comparatives in tequila last year in Don Julio given restocking and additional size extensions, with some benefit from a pull forward of imports related to tariffs on European imports." (Press Release)

• "Our guidance for the expected impact of tariffs into the US from UK and European imports remains unchanged at c.$200m pre mitigation on an annualised basis. This assumes that the current tariffs remain at 10% on imports from the UK and 15% on imports from Europe, and that Mexican and Canadian spirits imports remain exempt under USMCA, with no other changes to tariffs." (Press Release)

• "Given the actions to date and before any pricing, we expect to be able to mitigate around half of this impact on operating profit on an ongoing basis." (Press Release)

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Analysis

AstraZeneca reached an agreement with the US Department of Commerce to delay Section 232 tariffs for three years. This delay is intended to enable the company to fully onshore its medicines manufacturing in the United States, ensuring that all medicines sold in America are produced domestically and thereby mitigating the future impact of these tariffs.

As part of its strategy to broaden its US manufacturing footprint and support onshoring initiatives, AstraZeneca announced the groundbreaking of a new $4.5 billion manufacturing facility in Virginia in October 2025. This facility is planned to produce drug substances for its weight management, metabolic, and oncology portfolios. This investment is part of the company's broader plan to invest $50 billion in US manufacturing and R&D by 2030.

Sources

• "AstraZeneca has also reached an agreement with the US Department of Commerce to delay Section 232 tariffs for three years, enabling the Company to fully onshore medicines manufacturing so that all of its medicines sold in America are made in America." (Results Document)

• "In October 2025, AstraZeneca announced having broken ground on its $4.5bn manufacturing facility in Rivanna Futures, Albemarle County, Virginia. This is part of the Company’s plans to invest $50bn in US manufacturing and R&D by 2030, announced in July 2025." (Results Document)

• "We are also delivering on our strategy to strengthen our operations in the United States to power our growth. This includes a historic agreement with the US government to lower the cost of medicines for American patients, and broadening our US manufacturing footprint having broken ground at our new $4.5bn Virginia manufacturing facility in October.” (Pascal Soriot, Chief Executive Officer, AstraZeneca)

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Analysis

The company's financial targets for the current fiscal year account for the expected impacts from tariffs. This indicates that the company has integrated the anticipated financial consequences of existing tariffs into its planning and goal-setting processes.

Specific quantitative details regarding the magnitude of these tariff-related impacts on overall revenue, costs, or profitability for the current or future periods have not been disclosed. Additionally, the company identifies trade-related tariffs as a risk factor that could lead to disruptions in operations or price volatility in a market.

Sources

• "We're on track to deliver our financial targets for the year, which include the expected impacts from tariffs currently in place and remain focused on executing our Accelerating the Arches strategy to create long-term value for our stakeholders." (Company - Other Officer, Earnings Call)

• "Disruptions in operations or price volatility in a market can also result from governmental actions (whether proposed or realized, unilateral or bilateral), such as price, foreign exchange or trade-related tariffs or controls, trade policies and regulations, sanctions and counter sanctions, government-mandated closure of our, our franchisees' or our suppliers' operations, and asset seizures." (Filing, page 35)

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Analysis

The Company has been subject to tariffs and reciprocal tariffs imposed by the United States and other nations on various manufactured products. While the Company has largely mitigated the impact of tariffs enacted to date, future implementation of additional tariffs could negatively affect revenue growth and margins through decreased sales and increased cost of goods sold.

Tariffs have contributed to increased material cost inflation, component shortages, and disruptions in the supply chain. The overall effect of these challenges depends on the Company's ability to continue mitigating and offsetting their impact.

Mitigation strategies employed by the Company include strengthening its regional manufacturing strategy, pivoting to local sourcing within its supply chain, accelerating pricing actions, and asserting contractual rights through change orders. Historically, the Company has also expanded and redistributed its supplier network, utilized supplier financing, and implemented accelerated purchasing and productivity improvements to address trade restrictions and supply chain disruptions. The effectiveness of these actions for current and future trade restrictions remains uncertain.

Sources

• "Although the Company has been largely able to mitigate the impact of tariffs that have been enacted to date, if additional tariffs and reciprocal tariffs are implemented (whether as currently proposed or otherwise), such actions could negatively impact the Company's revenue growth and margins in future periods through decreased sales and increased cost of goods sold." (Filing)

• "Further, the Company has experienced, and could again experience, increased material cost inflation and component shortages, as well as disruptions and delays in its supply chain, as a result of global macroeconomic trends including the imposition of tariffs and other restrictive trade measures, as well as geopolitical and economic tensions." (Filing)

• "The Company is taking actions to mitigate the actual and anticipated impact of these events, including strengthening the Company's in region, for region manufacturing strategy, pivoting to local sourcing in its supply chain, accelerating pricing actions and asserting contractual rights through change orders." (Filing)

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Analysis

During fiscal year 2025, tariffs negatively impacted the company's gross profit margin. The tariff effect on gross profit was 20 basis points for the year.

Despite this headwind, the company's adjusted segment EBITDA margin expanded. This expansion was attributed to factors such as positive price less net material inflation, a higher mix of software, and the realization of cost reductions and synergies from acquisitions, which together more than offset the combined impact of inflation and tariffs.

Sources

• "offsetting a 20 basis point impact." (Company - CEO)

• "Gross profit from tariffs." (Company - Other Officer)

• "more than offset inflation and tariffs." (Company - Other Officer)

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Analysis

AMD's financial performance was affected by U.S. government export controls impacting the shipment of AMD Instinct MI308 GPU products to China. In the second quarter of 2025, this resulted in $800M in inventory and related charges. These charges affected non-GAAP gross margin, which would have been approximately 54% without these charges, instead of the reported 43% for that quarter.

The third quarter 2025 financial results, the current reporting period, did not include any revenue from the shipment of MI308 GPU products to China. Similarly, the company's guidance for the fourth quarter of 2025 also excludes any revenue from MI308 shipments to China.

AMD has received some licenses for MI308 and is working with customers to understand the demand environment and overall opportunity. The company has existing work in process to support this market if it opens up.

Sources

• "Our third-quarter results do not include any revenue from shipment of the MI308 GPU products to China." (Jean Hu)

• "Second quarter of 2025 results included $800 million in inventory and related charges as a result of the U.S. Government's export control on AMD Instinct™ MI308 data center GPU products. Excluding these charges, non-GAAP gross margin for the second quarter of 2025 would have been approximately 54%." (Press Release)

• "It's still a pretty dynamic situation with MI308. So that's the reason that we did not include any MI308 revenue in the Q4 guide. We have received some licenses for MI308, so we're appreciative of the administration supporting some licenses for MI308." (Lisa Su)

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Analysis

Amgen's updated 2025 financial guidance incorporates the estimated impact of tariffs that have been implemented. The company's management has stated that its biomanufacturing network is predominantly based in the U.S. and that it is investing over $3B in manufacturing in the U.S. this year. The company emphasizes engaging with policymakers to support policies that improve access, protect innovation, and strengthen the biomanufacturing ecosystem, especially within the U.S.

Sources

• "We benefit from 45 years of experience in this space and from having a manufacturing network that's predominantly based here in the U.S., serving American patients and patients all around the world since our inception." (Company - CEO)

• "This guidance includes the estimated impact of implemented tariffs." (Analyst, Unknown Affiliation)

• "This guidance includes the estimated impact of implemented tariffs, but does not account for any tariffs or potential pricing actions announced or described but not implemented as well as any tariffs, sector specific tariffs, or pricing actions that could be implemented in the future." (Press Release)

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Analysis

Zoetis' business is exposed to risks associated with tariffs and other trade protection measures. These measures are enacted by the United States and other countries, including those involved in U.S. international trade relations such as China, Canada, and the European Union.

In early 2025, the U.S. government implemented additional tariffs on specific goods imported into the U.S. from various countries. This action led to reciprocal tariffs and other responses from multiple nations. The company notes that the full scope and applicability of these measures to its operations remain uncertain. However, such actions could negatively affect demand and lead to increased product costs.

Zoetis is actively monitoring the evolving trade situation. The company is evaluating potential strategies and actions to moderate or minimize the effects of these tariffs. The full-year 2025 guidance incorporates the impact of currently enacted and assumed announced tariffs.

Sources

• "Our business is subject to risks related to, among other factors, tariffs and other trade protection measures put in the place by the United States or other countries, as well as U.S. international trade relations, including those with China, Canada and the European Union." (Filing)

• "Starting in early 2025, the United States government announced additional tariffs on certain goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response." (Filing)

• "While the final tariffs and other measures to be imposed, and their applicability to our business, remain uncertain, such actions may negatively impact demand and result in an increase in some product costs. We will continue to actively monitor the situation and evaluate actions that can be taken to moderate and/or minimize its effects." (Filing)

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Analysis

The company indicates that it has successfully mitigated the financial impact of tariff costs. While tariffs previously represented a cost, the company has implemented strategies to cover these expenses. As a result, tariff costs are no longer a drag on margins, and their dilutive effect has been neutralized. The company is recovering these costs on a dollar-for-dollar basis by the end of the year, which prevents margin dilution.

Sources

• "Second, because the team now covers for all the tariff costs and is not a drag on the margins. So it's not only recovering on the dollar-by-dollar basis by the end of the year now, but also is not diluted to margins, which is great news." (Paulo Ruiz, Company - CEO)

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Analysis

The company has secured a three-year grace period from certain U.S. tariffs. This grace period is tied to a commitment to increase investment in U.S. manufacturing. For currently imposed tariffs from China, Canada, and Mexico, the company's 2025 financial guidance already incorporates their impact. The company is evaluating and developing strategies to mitigate the potential long-term effects of tariffs on its business and operations.

Sources

• "we will have a three-year grace period from certain U.S. tariffs with our commitment to further invest in manufacturing in the U.S." (Company - CEO)

• "The agreement provides a three-year grace period during which time Pfizer products under a Section 232 investigation will not face tariffs, provided the company further invests in manufacturing in the United States." (Filing)

• "The company's guidance absorbs the impact of the currently imposed tariffs from China, Canada, and Mexico." (Press Release)

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Analysis

The company identified tariffs as a factor posing challenges to its Human Nutrition market. The provided information does not quantify the specific financial impact of these challenges on the company's revenue, margins, or costs, nor does it detail any specific mitigating strategies related to tariffs.

Sources

• "While tariffs and inflation continue to pose challenges to the Human Nutrition market, clean label and healthier categories are outpacing the broader industry." (Filing)

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Analysis

Tariffs and global trade disruptions are identified as a risk factor that could adversely affect the general retail environment, impacting tenants. The company believes the full impact of these tariffs has not yet materialized.

The company expects the burden of tariffs to be distributed among suppliers, retailers, and consumers, as retailers may be unable to absorb the entire cost and may need to pass on some of the expense or renegotiate vendor agreements.

While there is concern that tariffs could place more pressure on smaller retailers, the company has not observed any changes in leasing demand related to tariffs. Retailers continue to seek to expand their footprint.

Sources

• "I continue to believe that tariffs will have an impact. We have not yet seen all of it." (David Simon)

• "I think some of that will, as I said last time, I mean, it's a pretty consistent story. Some of that will be passed on to the supplier. Some of that will be eaten by the retailer, and some of that will be passed on to the consumer." (David Simon)

• "I do worry that it will put more pressure on the smaller retailers or the not the mammoth retailers that we all think about, right? Because they have the ability to handle it and try and use this as an opportunity to squeeze and increase market share." (David Simon)

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Analysis

The company expects tariffs to have an immaterial cost impact for the full year 2025. This assessment is based on current knowledge of tariff rates and regulations. The company's significant U.S. presence and a geographically diverse supply chain are cited as reasons for this immaterial impact.

However, the company notes that its foreign third-party manufacturers and suppliers are subject to U.S. legislation, including tariffs and trade restrictions. These factors could potentially lead to increased costs, a reduction in material supply, or delays in the procurement or supply of materials. This outlook remains subject to change given the dynamic nature of the tariff situation and the potential for sector-specific tariffs.

Sources

• "We continue to expect an immaterial cost impact from tariffs in 2025 based on what we know today due to our significant U. S. presence in our geographically diverse supply chain. Of course, given the dynamic nature of the tariff situation, including the potential for sector specific tariffs, this outlook is subject to change." (Charlie Wagner, context earnings call)

• "Our foreign third-party manufacturers and suppliers may be subject to U.S. legislation, including the BIOSECURE Act, tariffs, sanctions, trade restrictions and other foreign regulatory requirements which could increase costs or reduce the supply of material available to us, or delay the procurement or supply of such material." (Filing)

• "This financial guidance also includes an immaterial cost impact from tariffs in 2025 based on currently known tariff rates and regulations." (Press Release)

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Analysis

IDEXX Laboratories acknowledges that changes in tariff and trade policies could negatively affect its business, financial condition, and operating results. These policies, including potential retaliatory tariffs, have contributed to volatility and uncertainty in global markets.

The company relies on third-party suppliers from various regions, including Europe and Asia Pacific, for certain components and raw materials. Tariffs could increase the cost of goods, reduce profit margins, or decrease the competitiveness and availability of products in affected regions. The company's sales to customers in China represent less than 1% of overall revenues, minimizing direct exposure to China-specific trade actions.

To mitigate potential impacts from tariff changes, IDEXX is optimizing operations and inventory management. The company maintains a largely U.S.-based manufacturing footprint, which helps to navigate the evolving trade landscape. Management remains focused on ensuring continuous supply to customers while actively managing cost impacts associated with these trade policies, which are anticipated to extend into 2026.

Sources

• "Accordingly, changes in tariff and trade policies may adversely affect our business, financial condition, and operating results." (Filing)

• "While we are working to optimize operations and inventory management to the extent feasible, to help mitigate and reduce the potential impact from changes in tariff and trade policies, any imposed tariffs (including retaliatory tariffs) and our mitigation activities may cause our cost of goods to increase, our profit margins to decrease, or our products to become less competitive or less available in the applicable region." (Filing)

• "As noted previously, IDEXX remains well-positioned to navigate the ongoing changes in the trade landscape with a largely U.S.-based manufacturing footprint. We remain focused on continuous supply to customers while actively managing cost impacts, which will continue to play out into 2026." (Andrew Emerson, Chief Financial Officer)

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Analysis

Colgate-Palmolive reported that tariffs are contributing to pressure on both sales and profit growth. This impact is part of a broader volatile operating environment, alongside consumer uncertainty, geopolitical factors, and high-cost inflation.

In the third quarter of 2025, tariffs were one of several factors, including raw materials inflation, lower volumes, and transactional foreign exchange, that contributed to a year-over-year decline in gross profit margin. The company did not specify the individual financial impact of tariffs on its overall gross profit margin for the period.

Looking ahead to the fourth quarter of 2025, the company anticipates a "slightly greater" negative impact from tariffs, which is expected to partially offset other planned sequential improvements in gross profit. For the full year 2025, the estimated impact of tariffs is included in the net sales guidance, which projects low single-digit growth, but this impact is aggregated with foreign exchange effects.

To navigate these challenges, Colgate-Palmolive is implementing its 2030 strategy. This strategy focuses on accelerating science-based innovation across various price tiers, enhancing omnichannel demand generation, and increasing investments in revenue growth management (RGM) and agentic AI. These efforts are intended to improve market share, drive category growth, and foster internal productivity to counteract external pressures such as tariffs.

Sources

• "consumer uncertainty, tariffs, geopolitics, high-cost inflation, and other factors are all pressuring sales and profit growth across the consumer sector." (Noel Wallace, Company - CEO)

• "The sequential improvement for Q4 versus Q3, we're confident in because we expect that there'll be less material inflation on a year-on-year basis. Transactional and Colgate Total impact will be partially offset by a slightly greater tariff impact." (Company - Other Officer)

• "Based on current spot rates and including the estimated impact of tariffs announced and finalized as of October 29, 2025: The Company still expects net sales to be up low single digits, including a flat to low-single-digit negative impact from foreign exchange." (Press Release)

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Analysis

Tariffs have led to increased costs for Dominion Energy's Coastal Virginia Offshore Wind (CVOW) Commercial Project, affecting the company's financial results. For the third quarter of 2025, Dominion Energy recorded an after-tax charge of $50 million. This charge accounts for costs associated with the CVOW project that are not expected to be recovered from customers, stemming from overall project cost increases, including those attributable to tariffs.

The total estimated cost for the CVOW Commercial Project, currently at approximately $11.2 billion, already incorporates an estimated $0.3 billion increase due to tariffs. These tariffs apply to equipment originating from specific countries and steel-containing components, with deliveries spanning from March 2025 through the end of 2026. The company also anticipates a potential additional increase of up to $0.2 billion in project costs if the current tariffs on offshore wind and onshore electrical interconnection equipment remain in effect through the end of 2026.

To mitigate the financial impact of these rising costs, Dominion Energy has implemented cost and risk-sharing arrangements. These include a settlement with Virginia regulators and a partnership agreement with Stonepeak, which are designed to protect both customers and shareholders from the full burden of such increases.

Sources

• "The updated costs this quarter reflect the accelerated recognition of steel tariffs through the end of 2026, whereas we were previously recognizing all tariff costs on a quarter-by-quarter basis." (Steven Ridge, Executive Vice President and Chief Financial Officer)

• "As a result of this project cost increase, we recorded a modest charge this quarter, about $50 million after tax, included on Schedule 2 for costs not expected to be recovered from customers in accordance with the cost-sharing settlement with Virginia regulators and our 50% cost-sharing partnership agreement with Stonepeak. These cost and risk-sharing arrangements continue to work as intended to protect customers and shareholders." (Bob Blue, Chair, President and Chief Executive Officer)

• "The expected total project cost increase of $0.3 billion relative to Virginia Power's August 2025 construction update filing with the Virginia Commission reflects current projections of tariffs on equipment expected to be delivered from March 2025 through the end of 2025 that originates from Mexico, Canada, a European Union member or other applicable countries and on equipment expected to be delivered from March 2025 through the end of 2026 that contains steel." (Filing)

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Analysis

In the third quarter of 2025, tariffs had a mixed impact on Linde's performance in specific end markets and geographies. The U.S. metals and mining sector experienced new capacity opportunities, which were supported by recent tariffs. This contributed to the U.S. being identified as a positive area for metals production.

In the Americas manufacturing sector, the company observed a healthy uptick in activity. This was noted after the company had seemingly lapped previous tariff concerns, suggesting a stabilization and rebound in this market.

Despite the positive shifts related to tariffs, particularly in U.S. manufacturing, a degree of caution persists regarding larger expansion projects and capital expenditures. While tariff concerns have been addressed, customer sentiment indicates continued prudence in committing to significant new investments. The company expects the resilient volumes in broader manufacturing, linked to the dissipation of tariff concerns, to continue into Q4, with a potential pickup in actual projects during the first half or middle of next year.

Sources

• "Metals trends were region-specific and also impacted by tariffs. China is up, where Linde benefits from supplying tier-one customers. I believe the trends for tier-two and tier-three steel mills are considerably more stressed, but we do not supply them. The U.S. has been a bright spot for metals, not just production levels, but also new capacity opportunities as they've been supported by the new tariffs." (Sanjiv Lamba, CEO)

• "Starting in the Americas, we're seeing solid volume growth, especially in the United States. We seem to have lapped some of the tariff concerns, and this has translated into a healthy uptick in manufacturing activity." (Sanjiv Lamba, CEO)

• "There is no question we have lapped the tariff concerns, but there still remains a degree of caution. I think we see people progressing on looking at their major expansion projects or CapEx investment into the ground, but we still see a degree of caution around that." (Sanjiv Lamba, CEO)

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Analysis

The United States introduced new tariffs on imports from trade partners in 2025. The company estimates the impact of these tariffs to be less than one percent of its third-party spend for 2025.

This impact is not expected to materially affect the company's financial results. The company is working with its supply chain partners to identify alternative sourcing options to mitigate the tariff effects.

However, there is significant uncertainty regarding the duration and magnitude of current and potential future tariffs. This uncertainty also applies to the resulting impacts on the company, its suppliers, and its future operational results.

Sources

• "In 2025, the U.S. announced the imposition of various changing tariffs on imports from our trade partners." (Filing)

• "The tariff impact in 2025 is currently estimated at less than one percent of the company's third party spend and is not expected to be material to the company's financial results." (Filing)

• "The company continues to work with partners across its supply chain to identify alternative sourcing options and mitigate the impact of the tariffs." (Filing)

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Analysis

New U.S. tariffs, which began in the second quarter of fiscal year 2025, were levied on imports from various regions including China, India, Japan, South Korea, Taiwan, Vietnam, and the EU. These tariffs have had a material adverse impact on the company's operations by affecting its supply chain, the availability of raw materials and components, product pricing, and overall gross margin. Several countries have also imposed, or threatened to impose, reciprocal tariffs on U.S. imports. The ultimate impact of these trade measures remains uncertain and depends on potential future changes to tariff policies and retaliatory actions.

For the fourth fiscal quarter ended September 27, 2025, the company reported $1.1B in tariff-related costs, consistent with prior estimates. In the full fiscal year 2025, the Products gross margin percentage decreased compared to fiscal year 2024, a change attributed in part to these tariff costs, in addition to a different product mix.

Looking ahead to the first fiscal quarter of 2026, the company anticipates an estimated $1.4B in tariff-related costs. This guidance incorporates recent adjustments to tariff rates, including a reduction from 20% to 10% in China, which influences the projected cost impact relative to expected sales volume.

Sources

• "Beginning in the second quarter of 2025, new U.S. Tariffs were announced, including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the EU, among others." (2025 Form 10-K)

• "Company gross margin was 47.2%, above the high end of our guidance range and up 70 basis points sequentially, driven by favorable mix. This includes approximately $1.1 billion of tariff-related costs, which is in line with what we had estimated on our last call." (Kevin Parekh (CFO))

• "We expect gross margin to be between 47% and 48%, which includes an estimated impact of $1.4 billion of tariff-related costs." (Kevin Parekh (CFO))

• "It does comprehend the change that was just made, which we're very encouraged to see with the tariffs moving from 20% to 10% in China. And so that is factored in. And that is one of the reasons why it's not linear to volume, if you will." (Tim Cook (CEO))

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Analysis

Stryker was affected by new tariffs imposed by the United States government beginning in 2025. These tariffs apply to goods imported from numerous countries, including China and the European Union member states. The company anticipates these tariffs will lead to increased product costs and may negatively influence product demand and supply chains.

During the third quarter of 2025, the impact from tariff headwinds increased significantly compared to the second quarter. The company's adjusted gross margin for this period still showed a 50 basis points improvement over the third quarter of 2024. This margin favorability was primarily driven by a beneficial business mix and ongoing cost reduction efforts in supply chain and manufacturing operations, which served to mitigate the adverse effects of the tariffs.

Tariffs are expected to be more pronounced in the second half of 2025 and will partially offset anticipated margin expansion in the fourth quarter. Stryker monitors and evaluates the evolving tariff situation and any retaliatory measures threatened or implemented by other governments.

Sources

• "Beginning in 2025, the United States government has announced new tariffs on goods imported into the United States from dozens of countries, including China and the European Union member states." (Filing)

• "Our adjusted gross margin of 65% was favorable by 50 basis points over the third quarter of 2024, despite tariff headwinds, which we now estimate will have a net impact of approximately $200 million for the full year 2025." (Preston Wells (CFO))

• "The big offset this year is tariffs. We look at the tariff impact. It's more second-half weighted." (Preston Wells (CFO))

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Analysis

Motorola Solutions experienced increased costs on materials and components due to tariffs. These tariffs partially offset the benefits of higher sales and improved operating leverage on the company's adjusted operating margin for the third quarter of 2025. Specifically, the Products and Systems Integration segment's gross margin as a percentage of net sales decreased by 0.2% in the third quarter of 2025 due to higher tariffs. For the first nine months of 2025, the gross margin in this segment increased despite the impact of these tariffs.

The company implemented several strategies to mitigate the impact of tariffs. These actions include inventory acceleration, dual sourcing with two electronic manufacturing services providers, load balancing, and leveraging USMCA (United States-Mexico-Canada Agreement) compliance for manufacturing. Management believes these proactive measures helped anticipate and address potential tariff scenarios.

Looking ahead to 2026, the company expects tariffs to create headwinds in the first and second quarters. This is because tariffs were not in effect during those periods in the prior year. However, the anticipated impact for these quarters is expected to be more moderate than the $70 million to $80 million in margin challenges observed in the second half of 2025. Despite these expected tariff headwinds, the company maintains its guidance for continued operating margin growth in 2026.

Sources

• "Non-GAAP operating margin was 30.5% of sales, up 80 basis points, driven by higher sales and improved operating leverage, partially offset by higher tariffs." (Company - Other Officer)

• "In terms of mitigating actions, we've done tariff mitigation, inventory acceleration, dual sourcing with two EMSs. There is some load balancing we can do with some lead time. A lot of the manufacturing is USMCA compliant, which is a friendly fact and a way to mitigate tariffs." (Company - CEO)

• "As we look forward to next year, of course, we'll face some headwinds in Q1 and Q2 because tariffs weren't in place last year at that time. They'll be more moderated than that $70 to $80 million." (Company - Other Officer)

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Analysis

Floor & Decor Holdings, Inc. continues to navigate an environment impacted by tariffs. The company acknowledges that the U.S. has imposed significant additional tariffs on products from most sourcing countries, which have led to increased inventory costs and associated cost of sales. These cost increases may result in higher retail prices and could negatively affect sales. Additionally, the broader economic impact of tariffs has the potential to reduce consumer demand.

In response to these challenges, the company has implemented mitigation strategies. These include negotiations with vendors, sourcing products from alternative countries, and making retail pricing adjustments when deemed appropriate. Management indicated that these efforts were successful in maintaining healthy merchandising price gaps compared to competitors, protecting profitability, and enabling product margin improvement.

Despite the ongoing tariff environment, the company's gross margin performance reflects the successful execution of these mitigation strategies. The company noted an 80 basis points increase in product margin year over year, which helped offset pressure from distribution center costs, resulting in only a 10 basis point decrease in the overall gross margin rate for the third quarter of fiscal year 2025.

Sources

• "We're proud of our disciplined expense management and gross margin performance, which reflect a successful execution of our tariff mitigation strategies." (Company - Other Officer)

• "While we continue to mitigate the overall effect of increased tariffs, these tariffs have increased and will continue to increase our inventory costs and associated cost of sales, which may result in increased retail prices and may adversely impact sales." (Filing)

• "I don't feel like we're giving up gross margin because of that. I think we've done, in fact, I've done just the opposite, living through the tariff environment, mitigating that, transitioning SKUs from around the world. In a continuing tough environment, to be able to grow gross margin in that environment, I feel pretty good about what we've been able to do." (Company - Other Officer)

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Analysis

Gilead reports that the impact of known tariffs is manageable. The company noted that tariffs related to transfer pricing have a limited impact on its operations compared to peers. This is attributed to the majority of Gilead's intellectual property being domiciled in the United States. The company recognizes over 80% of its intellectual property in the U.S. and pays 90% of its taxes domestically. Additionally, Gilead maintains nearly 100% of its research and development capital infrastructure within the United States and has committed to further investments totaling $32 billion in the U.S. through 2030.

Sources

• "Finally, we continue to expect the impact of known tariffs to be manageable in 2025." (Andrew Dickinson)

• "...the vast majority of our IP is in the United States. As such, tariffs related to transfer pricing, they have more of a limited impact on Gilead versus our peers." (Daniel O'Day)

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Analysis

The Estee Lauder Companies Inc. is actively monitoring the potential effects of new and existing tariffs in the United States and other operating markets. The company notes that these tariffs have introduced volatility and uncertainty in global markets, affecting demand forecasting.

The impact of tariffs on the company's fiscal 2026 first quarter profitability and cash flows was not material. However, higher tariff rates are anticipated to adversely affect fiscal 2026 profitability and cash flows, with the potential for a material impact depending on actual rates and countries imposing tariffs.

To mitigate these effects, the company has implemented various strategies. These include utilizing available trade programs and optimizing its regional manufacturing footprint to bring production closer to the consumer, such as through its facility in Japan. These efforts, combined with increased supply chain agility, are expected to offset more than half of the anticipated impacts and enable the company to adapt to evolving trade policies. Further Profit Recovery and Growth Plan (PRGP) initiatives and potential pricing actions are being evaluated as additional strategies.

Sources

• "We are continuing to monitor and assess the potential effects of new and existing tariffs in the United States as well as in other markets in which we operate. These tariffs have led to significant volatility and uncertainty in global markets and difficulty in forecasting demand. We have implemented and are continuing to implement and consider additional mitigation measures. The impact was not material to fiscal 2026 first quarter profitability and cash flows, however, even if we can minimize some of these impacts, we anticipate higher tariff rates to have an adverse effect on fiscal 2026 profitability and cash flows, and depending on actual rates and countries imposing tariffs such adverse impacts could be material." (Filing)

• "Before I close, let me reaffirm our assumptions regarding evolving trade policies and enacted tariffs based on information available and net of our planned mitigation actions. Through October 24, we continue to expect tariff-related headwinds to impact profitability by approximately $100 million. This does not include any subsequent or future changes. We continue to evaluate additional strategies to further mitigate these impacts, including more PRGP initiatives and potential pricing actions." (Akhil Shrivastava, Executive Vice President and Chief Financial Officer)

• "The Company continues to closely monitor evolving trade policies and enacted tariffs, and its task force has been actively evaluating developments and mitigation strategies to reduce the potential impacts of tariffs. The Company has implemented a range of actions, including leveraging available trade programs and further optimizing its regional manufacturing footprint to bring production closer to the consumer--including through its facility in Japan. These efforts, combined with increased supply chain agility, are helping to offset more than half of the expected impacts and better position the Company to adapt quickly as trade policies continue to evolve." (Press Release)

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Analysis

Tariffs introduced earlier in 2025 have steadily increased throughout the past several months, contributing to ongoing headwinds for discretionary spending and impacting consumer confidence. However, Altria has not observed a material impact on adult tobacco consumer purchasing behavior or its costs during 2025.

Altria continues to monitor these tariffs as a macroeconomic headwind that could exert additional pressure. This includes potential effects on the price, availability, and quality of raw materials, ingredients, and component parts for production. Tariffs could also increase the cost of purchasing tobacco leaf from international suppliers, potentially exacerbating reductions in demand for tobacco leaf.

The company's 2025 full-year guidance incorporates the current estimated impact of increased tariffs on costs, which is not expected to be material. Altria is exploring opportunities to improve operational efficiency in traditional tobacco through a collaboration with KT&G, which may offer potential benefits related to duty drawback in international markets.

Despite the current non-material impact, Altria acknowledges that the continued effects of current macroeconomic and geopolitical conditions, including tariffs, on prices, availability, and quality of such items may continue, which could have a material adverse effect on its business, results of operations, cash flows, or financial position in the future.

Sources

• "Tariffs introduced earlier in 2025 have steadily increased over the past several months, weighing on consumer confidence and contributing to ongoing headwinds for discretionary spending. While we have not observed a material impact on adult tobacco consumer purchasing behavior as a result of tariffs, we continue to closely monitor the additional pressure that tariff-related price increases may exert." ("Filing")

• "We do not expect higher tariffs to have a material impact on our costs in 2025 based on presently available information on tariffs." ("Filing")

• "Our guidance contemplates the current estimated impact of increased tariffs on our costs, based on presently available information." ("Press Release")

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Analysis

The U.S. government's implementation of tariffs on certain foreign imports is projected to increase the company's expenses. The impact for the full year 2025 is anticipated to be less than $100 million in additional expenses, which will primarily be reflected within the Cost of sales. The company notes that the specific impact of these tariffs is dependent on factors such as their duration, scope, and amount, as well as any retaliatory measures taken by affected countries.

Looking ahead, the company indicates that potential future changes to tariffs, particularly those that might be imposed on pharmaceutical products by the U.S. government, could further negatively affect its business. However, no specific quantitative guidance for such future impacts has been provided.

Sources

• "The U.S. government has implemented tariffs on certain foreign imports into the U.S. The impact of the tariffs on Merck's business depends on a number of factors including the duration, scope and amount of the tariffs, as well as the extent of any measures that have been or will be taken by any affected countries, including tariffs imposed by foreign governments." (Filing)

• "At this time, the Company anticipates that tariffs implemented to date will result in less than $100 million of additional expenses in 2025 (which will be primarily reflected within Cost of sales)." (Filing)

• "Our gross margin assumption remains approximately 82%, including an updated estimate of less than $100 million in costs related to the impact of tariffs." (Caroline Litchfield, Chief Financial Officer)

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Analysis

Changes in U.S. trade policy, including increased tariffs, have introduced volatility and uncertainty into global markets. The company estimates that the incremental costs from new tariffs currently in effect in the U.S. and other operating markets will be approximately $100 million in 2025, with the majority impacting the North America segment.

These tariff impacts contributed to unfavorable pricing, net of cost inflation, which adversely affected gross profit and adjusted gross margin for both the three and nine months ended September 30, 2025. Specifically, the North America segment's operating profit for the nine months ended September 30, 2025, was negatively influenced by these factors.

The company is implementing strategies to mitigate these costs. It has also benefited from an exclusion for Brazilian eucalyptus from tariffs, which is an important factor for its operations. Furthermore, the company plans to leverage lower anticipated net tariff impacts in the fourth quarter to support investments.

Management reports that the gross element of tariffs has decreased from approximately $170 million to $100 million. The company expects to mitigate approximately $50 million of this tariff headwind in 2025 by activating various tools within its toolkit. This mitigation is expected to play out into early 2026.

Sources

• "We estimate that the incremental costs of the new tariffs that are currently in effect in the U.S., as well as in other markets in which we operate, to be approximately $100 in 2025, most of which will be incurred by the North America segment." (MD&A)

• "The decline in gross profit was primarily due to unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments, partially offset by gross productivity savings from integrated margin management of approximately $125." (MD&A)

• "Including the net impact from tariffs, we now project total cost of goods sold inflation of approximately $250 million for the North American and IPC businesses combined." (Nelson Urdaneta, CFO, Earnings Call)

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Analysis

Trane Technologies is monitoring macroeconomic indicators and uncertainties related to tariffs. The United States announced and implemented tariffs in 2025, with other countries imposing reciprocal measures. These global trade policy changes are ongoing and dynamic.

The potential challenges from these tariffs include disruptions to supply chains, volatility in commodity costs, and broader consumer and economic uncertainty. These factors could negatively impact the company's business operations, end markets, and financial performance.

To navigate the potential risks associated with these events, Trane Technologies relies on its business operating system, an in-region for region strategy, and its strength in execution. These measures are intended to help mitigate the effects of changing trade policies.

Looking ahead to 2026, the company's business operating system is positioned to manage both tariff and inflationary pressures.

Sources

• "We continue to monitor macroeconomic indicators and uncertainties resulting from the tariffs announced and implemented by the United States in 2025, as well as the tariffs imposed by other countries in response." (Filing, page 25)

• "These global trade policy changes continue to be dynamic, and as a result, we may experience supply chain challenges, commodity cost volatility, and consumer and economic uncertainty." (Filing, page 25)

• "We believe our business operating system, our in-region for region strategy, and strength in execution will enable us to navigate potential risks stemming from these recent events." (Filing, page 25)

• "Our business operating system is primed to stay ahead of tariff and inflationary pressures." (Company - CEO)

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Analysis

Increased U.S. tariffs significantly impacted Volkswagen Group's financial results. In the third quarter of 2025, these tariffs accounted for a headwind of €800 million. Year-to-date through the first nine months of 2025, the increased U.S. tariffs resulted in a total impact of €2.1 billion, with a cash out of €1.9 billion. This negatively affected the operating margin, which stood at 4.5% for the nine-month period when including tariffs but excluding other non-recurring effects.

The tariffs primarily affected sales volumes and profitability in the North American market. The company originally planned for a sales increase in North America but experienced an 8% decrease. This decline was partly due to trade uncertainties and measures implemented to mitigate tariff effects. For instance, shipping entry-level models like the Jetta and Taos from Mexico to the U.S. became unfeasible under a 27.5% tariff regime, leading to lost sales and margin.

Volkswagen Group is implementing several mitigation strategies to counter the tariff impact. These include intensified cost reduction efforts, accelerating efficiency programs, and exploring greater localization. Discussions are ongoing regarding a potential Audi factory in the U.S. The company is also working to increase the production of USMCA-compliant parts and adjusting pricing strategies where feasible. The Scout project, with its localized production in South Carolina, is identified as a promising initiative to strengthen the U.S. footprint.

Sources

• "…results were significantly impacted by headwinds of €5.3 billion in the third quarter, mainly by costs related to a realignment of Porsche product strategy and the goodwill impairment of our stake in Porsche in the combined magnitude of €4.7 billion and the increased U.S. tariffs of about €800 million." (Company - CEO)

• "…the result after nine months includes special effects in a magnitude of €7.5 billion, mainly increased U.S. tariffs in a magnitude of €2.1 billion…" (Company - CEO)

• "Excluding the non-recurring effects, but including costs related to the U.S. tariffs, the group operating margin would have amounted to 4.5%." (Company - CEO)

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Analysis

During Q3 2025, tariff uncertainties contributed to weakness in Mexico's economy, impacting both Energy Management and Industrial Automation segments in the region. This resulted in Mexico's sharp decline in North America's overall performance. Previously, tariff uncertainty also led to project delays in process and hybrid industrial automation, affecting sales earlier in the year.

Schneider Electric implemented positive pricing adjustments in North America to counteract tariff headwinds. However, the benefits from these pricing actions were partially negated by the ongoing deflationary environment in China. This dynamic indicates that while specific regional responses were made, broader market conditions affected the net outcome.

The company does not expect to fully offset the combined impacts of inflation and tariffs within the 2025 calendar year. However, management anticipates that these impacts will be offset over the coming quarters, consistent with how the company has addressed similar situations in previous cycles.

The reaffirmed 2025 financial targets for adjusted EBITA growth and margin improvement already incorporate the anticipated effects of trade tariffs. These targets reflect the company's current outlook after considering the geopolitical environment and enacted tariffs.

Sources

• "Product growth was volume driven, with positive pricing in North America in response to tariff headwinds offset by the impact of a continuing deflationary environment in China." (Press Release)

• "Mexico was particularly weak across end markets due to macroeconomic issues tied to tariff uncertainties." (CEO, Earnings Call)

• "Net-net, we don't expect to fully offset, like I mentioned, the impacts of both inflation and tariffs in this calendar year. That said, we would expect, like in prior cycles, that we would offset those impacts over the coming quarters." (CEO, Earnings Call)

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Analysis

Georgia Power implemented a new tariff structure for large load customers, as established by the Georgia Public Service Commission in the spring. This new structure is described as instrumental in attracting and securing commitments from credit-quality counterparties.

The new contracts, operating under this tariff structure, incorporate provisions such as minimum bills designed to cover all costs, regardless of customer usage. This mechanism aims to protect both existing customers and investors by ensuring cost recovery for the incremental investments required to serve new customer demand.

The company noted an educational effort was necessary to help customers understand the structure and the need for these protective measures within long-term commitments. This approach supports balancing growth with affordability and has facilitated the execution of new large load contracts.

Sources

• "Like we've talked about, we've moved into a mode working underneath, at least at Georgia Power, working underneath the Georgia Public Service Commission new rules that came into place in the spring." (Company - CEO)

• "What these contracts, the ones that we've signed now, have brought to the table are great protections for customers and our investors. The minimum bills cover all of our costs, whether or not the meter spins." (Company - CEO)

• "Consistent with our approach across Southern Company, these contracts include pricing and terms that are designed to pay for the incremental cost to serve new customer demand while also benefiting and protecting existing customers, helping to ensure growth does not come at the expense of affordability." (Company - Other Officer)

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Analysis

Tariffs contributed to the acceleration of inflation into the mid-single-digit range. This inflationary pressure is primarily due to tariffs and rising beef costs, and it is anticipated to persist in 2026. This trend impacts the company's cost structure.

In the third quarter of 2025, tariffs specifically impacted the cost of sales by approximately 30 basis points. The company estimates an ongoing impact of about 50 basis points from tariffs. This figure does not include any impact from Mexican or Canadian imports that fall under the USMCA exemption.

The company does not plan to fully offset this incremental inflation, including the tariff impact, through pricing in the near term. This approach is expected to pressure margins but is considered necessary to maintain value for guests during the current economic climate. The company aims to work with partner suppliers to mitigate inflation, rather than passively accepting a 5% inflation rate in the upcoming year.

Sources

• "Additionally, inflation is accelerating into the mid-single-digit range, primarily due to tariffs and rising beef costs, and we anticipate it will remain in this range in 2026." (Company - Other Officer)

• "Tariffs impacted the quarter by about 30 basis points, and we continue to estimate that we will see about a 50 basis point ongoing impact from tariffs, which does not include any impact from Mexican or Canadian imports that fall under the USMCA exemption." (Company - Other Officer)

• "The benefit of our menu price increase from last year and cost of sales efficiency is more than offset inflation, primarily in beef and chicken, as well as the impact of tariffs." (Company - Other Officer)

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Analysis

Tariffs and trade restrictions have influenced the company's financial performance. Gross margin has been affected by a consistent tariff impact, estimated to be a reduction of approximately 50 to 100 basis points quarter to quarter. This factor contributes to changes in other service and manufacturing costs.

Separately, extended export controls from the U.S. Government are projected to result in a revenue impact for the company. This market access loss for certain customers in China is estimated to be between $300 million and $350 million for calendar year 2026. While the immediate impact on the December quarter (Q2 FY26) was considered immaterial due to the ability to reallocate product slots, the total revenue loss for the subsequent calendar year is expected to be distributed across both halves.

The company is implementing mitigating strategies to address the structural reality of higher tariffs. These include assessing operations to reduce exposure by optimizing how parts are moved globally and exploring ways to reduce leakage and drawback scenarios by tracking different part attributes.

Sources

• "As I've said over the last couple of quarters, there is a tariff impact that we're dealing with, which is more or less consistent quarter to quarter. That's roughly 50 to 100 basis points of the impact." (Bren Higgins)

• "We estimate the revenue impact on the December and calendar twenty twenty six to be approximately 300 million to $350 million for KLA." (Bren Higgins)

• "my hope is, given some of the things that we have going on in the company in terms of assessing how we can try to mitigate that exposure, that that becomes less of a headwind over time. I think structurally we're in a world where we'll be dealing with higher tariffs. But I do think there are things we do in terms of how we operate the company, where there's some ROI in terms of just how we move parts around the world and how we reduce the leakage and drawback scenarios as we—we understand and track different parts attributes that help reduce some of that. So I think there are a number of dynamics at play that will become less of a headwind over time." (Bren Higgins)

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Analysis

Tariffs increased product and distribution costs, contributing to a contraction in Starbucks' consolidated operating margin for fiscal year 2025. This impact was part of broader inflationary pressures. The company explicitly noted that inflation, which includes tariffs and coffee prices, was a primary driver for the 500 basis point contraction in non-GAAP operating margin in the fourth quarter of fiscal 2025.

Starbucks anticipates that macroeconomic challenges, specifically new tariffs and dynamic coffee prices, will continue to be a factor in future operating results. The company expects coffee prices to remain a headwind through at least the first half of fiscal 2026, which is an associated impact given tariffs are linked to commodity price volatility.

Sources

• "We expect that the macroeconomic challenges we have been experiencing, including impacts from new tariffs and dynamic coffee prices, will continue; however, we are encouraged by the results we have seen from our 'Back to Starbucks' initiatives." (Filing)

• "The price and availability of these commodities, including impacts from volatility in green coffee prices and new tariffs, directly impact our results of operations, and we expect commodity prices, particularly coffee, to continue to impact future results of operations." (Filing)

• "Shifting to margin, our Q4 consolidated operating margin was 9.4%, contracting 500 basis points from the prior year. This was primarily driven by inflation, led by coffee prices and tariffs, as well as investments in support of Back to Starbucks, largely in labor hours." (Cathy Smith, Company - Other Officer)

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Analysis

MercadoLibre's financial performance during the nine-month period ended September 30, 2025, was impacted by increased expenses attributed to tax withholding related to export services. These duties are identified as a component of both product and technology development expenses and general and administrative expenses.

Specifically, the company reported a $53 million increase in product and technology development expenses and a $22 million increase in general and administrative expenses, primarily due to higher tax withholding in connection with intercompany export services billing duties. This indicates an elevated cost burden on the company's operations directly linked to these duties.

Sources

• "certain tax withholding related to export duties" (Filing)

• "$53 million increase in other product and technology development expenses mainly related to higher tax withholding in connection with intercompany export services billing duties." (Filing)

• "$22 million increase in other general and administrative expenses mainly related to higher tax withholding in connection with intercompany export services billing duties." (Filing)

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Analysis

Tariffs contributed to an increase in taxes other than income taxes for the nine months ended September 30, 2025. This increase was part of a larger $405 million rise in taxes other than income taxes, which also stemmed from the expiration of the Biodiesel Blender Tax Credit. The specific financial impact solely attributable to tariffs was not quantified.

The company's forward-looking statements acknowledge that economic, political, and regulatory conditions, including the imposition of tariffs, could impact its business. However, no specific future financial impacts or mitigation strategies related to tariffs were detailed.

Sources

• "The increase for the nine months ended September 30, 2025, was also impacted by an increase in tariffs and customs duties." (Filing)

• "Economic, political and regulatory conditions domestically and internationally, including imposition of tariffs or other tax incentives or disincentives." (Filing)

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Analysis

The global trade landscape exhibits volatility, marked by various countries implementing new or modified tariffs or eliminating previous ones. The U.S. enacted updated reciprocal tariff rates on August 7, 2025, affecting imports from nations without bilateral trade agreements. Furthermore, the U.S. and China extended a pause on reciprocal tariffs until November 10, 2025, pending ongoing trade negotiations.

As of September 30, 2025, the U.S. maintains tariffs on goods from China and on imports from Canada and Mexico that do not comply with the United States-Mexico-Canada Agreement. New and modified tariffs on aluminum, steel, and copper imports were also implemented during 2025. The company's year-to-date and third-quarter 2025 results reflect its assessment of these tariff impacts and any mitigating actions undertaken.

The company actively monitors the global trade environment for new or changing tariffs, retaliatory measures, trade agreements, and export restrictions. This monitoring aims to identify and address potential impacts on its business, supply chain, and customers, while ensuring compliance with government import and export control requirements. The U.S.-China trade relationship remains an ongoing concern due to tariffs, export restrictions, and supply chain constraints, with an unclear impact on future 737 and 787 aircraft deliveries to China.

Sources

• "Collectively, these tariffs, and any retaliatory actions taken by countries in response to the U.S. tariffs, could have a material impact on our financial position, results of operations and/or cash flows. Our year-to-date and third quarter results reflect our best estimate of the impacts of the tariffs enacted as of September 30, 2025, and certain potential mitigating actions." (Filing)

• "We continually monitor the global trade environment for new and/or changing tariffs, retaliatory actions, trade agreements, export restrictions, sanctions or other restrictions that may impact us or our supply chain or customers, and work to mitigate impacts to our business." (Filing)

• "The current state of U.S.-China relations remains an ongoing watch item. China is a significant market for commercial aircraft, and we have long-standing relationships with our Chinese customers. Overall, the U.S.-China trade relationship is challenged due to tariffs, export restrictions and related supply chain constraints, and other economic and national security concerns." (Filing)

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Analysis

CVS Health identifies the potential for increased costs and supply chain disruptions due to the implementation of new tariffs or changes in existing tariffs. These tariff-related pressures could adversely affect consumer demand. Additionally, tariffs may hinder the company's capacity to deliver client savings, which could impact overall financial results.

Sources

• "Implementation of new tariffs or changes in tariffs, including the impact of tariffs on trade relations between the U.S. and foreign countries, create exposure for increased costs and supply chain disruptions that can adversely impact consumer demand, the ability to deliver client savings or the Company's financial results." (Filing)

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Analysis

During the third quarter of 2025, tariffs significantly impacted the company's financial performance, primarily increasing manufacturing costs across all three primary segments. Unfavorable manufacturing costs, largely attributable to higher tariffs, were a major factor in the decrease in overall operating profit. The net impact of these incremental tariffs approached the upper end of the company's estimated range for the quarter.

Management indicated that tariffs contributed to a reduction in adjusted operating profit margin. This impact was not confined to a single segment but was observed across Construction Industries, Resource Industries, and Energy & Transportation, with charges also recorded in corporate items.

The company is actively evaluating strategies to mitigate the ongoing and future effects of tariffs. These include short-term cost reductions and limited adjustments to sourcing. However, longer-term structural changes to the supply chain would necessitate significant investments and would only be implemented once there is greater certainty in trade negotiations and policy, reflecting a cautious approach to avoid potentially redundant expenditures.

For the full year 2025, the company expects a substantial financial impact from incremental tariffs, even after accounting for some mitigating actions and cost controls. The guidance suggests that the tariff headwind will be more pronounced in the fourth quarter of 2025 compared to the third quarter, largely due to the timing of tariff rate adjustments.

Sources

• "The net impact of incremental tariffs was near the top end of our estimated range of $500 million to $600 million." (Company - CEO, context earnings call)

• "Based on the incremental tariffs announced in 2025 and in place by November 1, 2025, we expect the impact from incremental tariffs for 2025 will be around $1.6 billion to $1.75 billion, net of some mitigating actions and cost controls." ("Filing")

• "In the fourth quarter of 2025, we anticipate a net incremental tariff impact of about $650 million to $800 million." ("Filing")

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Analysis

Verizon Communications Inc. has been actively monitoring tariff developments initiated by the U.S. government on goods imported from various countries during 2025. The company is also analyzing potential reciprocal or retaliatory tariffs from other nations.

To date, these tariff-related developments have not materially impacted Verizon's financial condition or results of operations for the nine months ended September 30, 2025. The company is collaborating with its strategic suppliers to manage any potential impacts.

While the direct financial impact has not been material thus far, Verizon acknowledges the evolving nature of these tariff policies. The company states it cannot predict with certainty the ultimate future impacts, but those impacts could become material.

Sources

• "During the course of 2025, the U.S. government announced tariffs on goods imported from various countries to the U.S." (Filing)

• "We continue to actively monitor the tariff developments and analyze their potential impacts on our business, cost structure, supply chain and broader economic environment." (Filing)

• "While these developments have not had a material impact on our financial condition or results of operations to date, due to their evolving nature, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future but those impacts could be material." (Filing)

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Analysis

TE Connectivity acknowledges that its business and operating results are influenced by tariff and trade policies, alongside other global economic factors. The company actively monitors developments in these policies.

To address the impact of new tariffs and changes in existing tariff rates, TE Connectivity implements mitigating strategies. These include the use of pricing actions and sourcing changes, which the company states largely offset the impacts.

While the company's strategies largely mitigate the overall financial impact, certain business segments experience localized effects. In these areas, passing on tariff pricing results in revenue without corresponding margin, which can introduce volatility or 'noise' in those specific business operations. This is characterized as a recovery mechanism rather than a direct financial loss for the company as a whole.

Sources

• "We are actively monitoring developments in tariff and trade policies and the potential impacts on our business. In addition, we are using pricing actions and sourcing changes to largely mitigate the impacts of new tariffs and changes in existing tariff rates." (Filing)

• "I would say in certain pieces of the business that are passing on a little bit more tariff pricing, that tariff pricing, we, and the revenue that comes from that does not include any margin behind it. When we do see a spike in some of that tariff pricing, some of those businesses struggle a little bit because you might add, you know, revenue with no margin, but that's just more of a recovery mechanism. That can create noise." (Heath Mitts, Earnings Call)

• "This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $113 million and $0.02 per share, respectively, in the first quarter of fiscal 2026 as compared to the same period of fiscal 2025 and includes the impact of currently enacted tariffs." (Filing)

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Analysis

GSK's full-year guidance for 2025 incorporates tariffs that have been enacted thus far. This implies that any current financial impact from these tariffs is already factored into the company's reported and projected figures.\n\nThe company's guidance also accounts for a potential 15% impact from European tariffs. This indicates a forward-looking consideration of tariff effects on future financial performance.\n\nGSK has identified mitigation actions to address the potential financial implications of these tariffs. This suggests the company has prepared strategies to manage and potentially offset adverse impacts.

Sources

• "Our full-year guidance is inclusive of tariffs enacted thus far and indicated potential European tariffs impact of 15%." (Press Release)

• "We are positioned to respond to the potential financial impact of tariffs, with mitigation options identified." (Press Release)

• "As a reminder, our guidance is inclusive of tariffs enacted and indicated thus far. We are positioned to respond to these with mitigation actions identified." (Julie Brown (CFO))

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Analysis

Tariffs and related uncertainty contributed to the macroeconomic volatility faced by the company, affecting overall consumer confidence. This was identified as one of the primary factors for the adjustment to the company's 2025 financial guidance, which now anticipates a decline of approximately 15% in adjusted EPS on a constant currency basis for the fiscal year.

The company is monitoring the potential implementation of proposed tariffs and other trade restrictions. Such actions are expected to adversely impact both revenue and cost of goods sold. If these proposed tariffs are enacted, or if new tariff actions are implemented, the company expects a significant adverse impact on its business operations and financial performance.

Mondelez International utilizes the U.S.-Mexico-Canada Agreement (USMCA) to avoid tariffs on most products and materials imported from Mexico and Canada. However, the company acknowledges the potential for the current trade environment to evolve, which could affect these exemptions. Further protectionist trade measures and retaliatory actions are noted as risks that could lead to increased costs, pricing pressures, disrupted consumer spending patterns, and adverse effects on market stability and consumer confidence.

Sources

• "The three main ones are the tariffs and related uncertainty affecting the overall consumer confidence." (Luca Zaramella)

• "If the provisions of certain proposed tariffs for which implementation is currently delayed are ultimately implemented as originally proposed, or if additional tariff actions are implemented, we would expect those adverse impacts on our business operations and financial performance to be significant." (Filing)

• "This outlook does not reflect any potential tariff changes to United States-Mexico-Canada Agreement (USMCA) compliant trade." (Press Release)

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Analysis

The company is subject to digital services taxes imposed by various international jurisdictions, primarily within the European Union. These taxes are levied on revenues generated from digital advertisements or the use of online platforms. Rates for these taxes typically range from 1.5% to 10% of revenues deemed generated in the respective jurisdiction. The company records these applicable digital services taxes within "Sales and other expenses" in its Unaudited Consolidated Statements of Operations.

For the nine months ended September 30, 2025, the company reported a positive financial impact from lower digital services taxes and other similar taxes. This reduction contributed to a decrease in "Sales and other expenses" as a percentage of total revenues, benefiting operating margins during this period.

Sources

• "Many jurisdictions, particularly in the EU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Unaudited Consolidated Statements of Operations." (Filing)

• "Sales and other expenses as a percentage of total revenues decreased year-over-year for the nine months ended September 30, 2025 due to efficiencies in third-party customer service costs, lower digital services taxes and other similar taxes, as well as lower provisions for expected credit losses, partially offset by the impact of increased merchant transactions, which grew faster than total revenue." (Filing)

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Analysis

The company acknowledges that the global operating environment remains unpredictable, with evolving international trade policies potentially impacting costs and demand. Management indicates preparedness for this dynamic trade environment.

To manage potential effects, the company employs a "local-for-local" production model. Additionally, a trade surcharge has been implemented.

The full implementation of this trade surcharge contributed to an acceleration in pricing to 3% during the third quarter of 2025. The company's objective is to maintain pricing closer to 3%, with tariffs and developments in China influencing this target.

Sources

• "We expect the macroeconomic environment to remain challenging as a result of evolving international trade policies that could have a significant impact on costs and demand." (MD&A, page 43)

• "We believe that the Company is well-prepared to manage through the dynamic international trade environment, given our "local-for-local" production model and our recently implemented trade surcharge." (MD&A, page 43)

• "Pricing accelerated to 3% this quarter, driven by the full implementation of our trade surcharge and continued value pricing that's working really well." (Company - CEO)

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Analysis

Tariffs are expected to contribute to an increase in raw material costs for 2026. The company views raw material costs as increasing by a low single-digit percentage overall for that year, with tariffs being a factor in this projection.

To mitigate these and other cost increases, the company plans to implement efficiency and simplification initiatives. It also intends to take disciplined pricing actions, including a 7% price increase for the Paint Stores Group effective January 1, and targeted price increases in other segments.

Sources

• "Our initial view of raw material costs is that they will be up low single digits, inclusive of tariffs, with varying costs for individual commodities." (Company - CEO)

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Analysis

Tariffs and evolving trade policies, including de minimis exclusions, impacted the company's International segment. Volume on the China-to-U.S. trade lane declined by over 20% in the third quarter of 2025, which pressured International segment margins. This decline is expected to continue into the fourth quarter of 2025. Trade policy changes also contributed to a $110 million revenue decline in Forwarding businesses during the third quarter and a $146 million decline year-to-date in 2025, primarily due to demand softness and tariff uncertainty in the China-to-U.S. trade lane.

The elimination of the de minimis exemption for U.S. imports caused a tenfold increase in daily customs entries requiring dutiable clearance, rising from 13,000 in March 2025 to 112,000 in September 2025. To manage this complexity, the company invested in next-gen brokerage capabilities, upgrading shipping systems, and integrating agentic AI. These efforts allowed 90% of cross-border transactions to be processed digitally without manual intervention, mitigating additional costs.

The direct financial impact from the de minimis exemption changes resulted in a $60 million reduction in the third quarter of 2025. A further $50 million direct impact is expected in the fourth quarter of 2025. These impacts are largely demand-related.

International operating profit decreased by $101 million year-over-year in the third quarter of 2025, reflecting pressures from trade lane shifts, product trade down, and lower demand-related surcharges. The full impact of tariffs on small and medium-sized businesses (SMBs) is anticipated in 2026. The company is actively working with SMB customers to adjust sourcing and transportation strategies to counter these future impacts. Management expects permanent changes to trade flow equilibrium until the system settles, which will influence the attainment of mid-to-high teens international margins. The company is making operational changes and investments in its Asia network to adapt to evolving trade lanes.

Sources

• "Global trade policy changes including pending and enacted tariffs and the de minimis exclusions continued during the third quarter of 2025 and resulted in shifting trade lane volumes, particularly reducing volumes on our China to U.S. lane, pressuring our International segment margins during the third quarter and year-to-date periods." (Filing)

• "Following the elimination of the de minimis exemption for U.S. imports, UPS experienced a tenfold surge in daily customs entries. We responded swiftly, upgrading our shipping systems to capture the expanded data requirements mandated by U.S. Customs and Border Protection. To manage the increased volume and complexity, we enhanced our customs brokerage capabilities by integrating agentic AI. This advanced technology streamlined formal entry processes. At UPS, we don't just move goods, we remove friction. By absorbing regulatory complexity, we help our customers minimize disruptions and keep global commerce flowing. Due to the investments we've made in our brokerage business, we can absorb this complexity without adding cost that isn't offset by revenue." (Carol B. Tomé, CEO)

• "In the third quarter, that had about a $60 million impact for us. We estimate in the fourth quarter the direct impact will be $50 million. A lot of this is demand related, right, because the technology allows us to scale our brokerage operations. There is a demand impact." (Brian Dykes, CFO)

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Analysis

Tariffs and trade enforcement measures have supported the American steel industry by reducing finished steel imports. These imports decreased by approximately 11% year to date through August 2025. This reduction in imports benefits domestic producers like Nucor by creating a more favorable competitive environment.

Nucor views Section 232 measures and ongoing trade enforcement as essential tools to counter global steel overcapacity. The company advocates for the continued application of tariffs without exceptions or loopholes until fundamental changes occur in the global steel industry.

The International Trade Commission (ITC) recently determined that American steel producers were materially injured by imports of corrosion-resistant steel from 10 countries. This decision facilitates the Department of Commerce's issuance of final anti-dumping and countervailing duty orders. Additionally, the Department of Commerce is investigating rebar imports from four countries, with a preliminary determination expected in the current quarter.

The plate market has also experienced a positive impact from tariffs. While imports initially increased at the beginning of the year, they have since decreased significantly over the last few months of the third quarter of 2025.

Sources

• "Turning to trade policy, we've seen meaningful federal action this year supporting the American steel industry. Section 232 measures and ongoing trade enforcement are curbing imports, with finished steel imports down nearly 11% year to date through August." (Leon Topalian, context earnings call)

• "We believe that tariffs must stay in place with no exceptions or loopholes until there are fundamental changes in the global steel industry." (Leon Topalian, context earnings call)

• "We're starting to see the impact of the tariffs on imports, right? Imports were up a little bit in the beginning of the year but have come down pretty significantly over the last couple of months." (Brad, context earnings call)

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Analysis

During the period, Cadence Design Systems experienced specific impacts related to U.S. export control regulations concerning EDA Software and Technology for China. While these restrictions were in effect, the company observed a decrease in revenue in China, primarily due to reduced deliveries of software offerings to customers in that region.

The rescission of these license requirements by the Bureau of Industry and Security (BIS) in July 2025 positively impacted the company's performance. This change enabled restored access to EDA Software and Technology for affected customers and facilitated additional hardware deliveries that had been prevented in the prior quarter. This recovery contributed to a significant increase in China's revenue for the third quarter of fiscal 2025 and an increase in overall backlog.

The company monitors broader macroeconomic and geopolitical factors, including the imposition of new or higher tariffs. While acknowledging the potential for future restrictions, the current guidance assumes the existing export control regime will remain substantially similar. Management states that their business model provides some resilience against such factors and they will continue to monitor direct and indirect impacts.

Sources

• "During this period, our revenue in China decreased primarily due to reduced deliveries of software offerings to our customers in China due to these license requirements. Following the rescission, we have restored access to EDA Software and Technology for affected customers in accordance with these updated U.S. export regulations." (Filing)

• "China revenue also benefited from the rescission by BIS in July 2025 of certain license requirements applicable to the export, re-export, or in-country transfer of EDA Software and Technology, which enabled additional hardware deliveries that were prevented during the quarter ended June 30, 2025." (Filing)

• "Our backlog grew from $6.4 billion to $7 billion, so there's a growth of $600 million. I would say about 25% of that, about $150 million, is catch-up from Q2 to Q3." (Company - CEO, context earnings call)

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Analysis

The United States government announced additional tariffs on goods imported from numerous countries on April 2, 2025, with certain counter-tariffs by other countries. These tariffs became effective on August 1, 2025. Illinois Tool Works Inc. implemented strategies to mitigate the impact, primarily by manufacturing products in the markets where they are sold. The company also pursued price increases and supply chain actions to recover increased tariff-related costs.

For the third quarter of 2025, the company's pricing and supply chain actions more than covered tariff costs, resulting in a positive impact on both adjusted EPS and operating margins. Management indicated that the impact of tariffs, from a cost perspective, is largely behind the company and is easing as a demand headwind.

Despite the successful cost mitigation, current tariff policies have introduced additional uncertainty, which could negatively impact overall demand from the company's customers. The company continues to assess the overall impact and implement actions to moderate or minimize these effects.

Sources

• "On April 2, 2025, the United States government announced additional tariffs on goods imported to the U.S. from numerous countries." (Filing)

• "effective pricing and supply chain actions more than covered tariff costs and positively impacted both EPS and margins in the quarter." (Company - CEO)

• "Additionally, we expect that tariff-related pricing and supply chain actions will more than offset tariff costs and favorably impact both EPS and margins." (Company - CEO)

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Analysis

The company acknowledges tariffs as a potential external factor influencing its operations and future financial performance. Tariffs are cited as a risk that could lead to supply and pharmaceutical shortages and disruptions. The company’s HealthTrust team actively monitors and manages tariff risk. This involves strategic sourcing, negotiation with vendor partners on contracts, and making decisions regarding the countries of origin for products. These efforts are part of a broader resiliency plan designed to offset potential impacts from various external factors, including trade policies.

While tariffs are included in the considerations for the company’s forward-looking statements and guidance for 2025, no specific financial impact from tariffs was reported for the current period.

Sources

• "the other component that we're keeping a close watch on are tariffs, where our HealthTrust team continues to work through a very diligent effort to manage the tariff risk, both in terms of sourcing, the way that we negotiate with contracts, our vendor partners on contracts, and then also in terms of moving products and moving choices of products across countries of origin." (Company - CEO, Earnings Call)

• "potential impacts of changes to U.S. trade policy and tariff levels." (Form 10-Q, Recent Developments)

• "supply and pharmaceutical shortages and disruptions (including as a result of tariffs or geopolitical disruptions);" (Form 10-Q, Forward-Looking Statements)

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Analysis

The company experienced a negative impact from tariffs on its gross margin during the first quarter of fiscal year 2026. Higher costs from tariffs contributed 60 basis points to the overall 70 basis point decline in reported gross margin. This indicates that tariffs directly affected the profitability of products across various segments.

Several business segments were specifically affected by higher tariff costs. These include Beauty, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care, where tariff costs contributed to a decrease in gross margin. The Grooming segment also faced higher tariff costs, which partially offset the gross margin improvement from increased pricing.

For fiscal year 2026, the company expects higher costs from tariffs to be an after-tax headwind of approximately $400 million. The company noted that this figure is an improvement compared to prior isolated tariff impact estimates, primarily due to the exclusion of certain natural materials and ingredients from tariff structures and the rescinding of retaliatory tariffs, such as those by Canada. The company also indicated that related supply chain investments and pricing adjustments are assumed within its guidance to mitigate these tariff impacts.

Sources

• "Gross margin decreased 70 basis points to 51.4% of net sales for the quarter. The decrease in gross margin was due to: ... 60 basis points of higher costs from tariffs" (Filing)

• "P&G now expects a commodity cost headwind of approximately $100 million after tax and higher costs from tariffs of approximately $400 million after tax for fiscal 2026." (News Release)

• "The biggest help on tariffs has been exclusion of materials, natural materials, and ingredients that cannot be grown in the U.S. ... Retaliatory tariffs coming down. Canada rescinding retaliatory tariffs of 25%, which just happened before the last quarterly call. Those components in aggregate are representing the commodity and tariff headwinds." (Andre Schulten, Company - CEO)

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Analysis

The company observed that anticipated changes to tariffs influenced volumes in certain segments. Automotive volumes increased, partly due to shippers pulling forward shipments in expectation of tariff adjustments. Similarly, international intermodal volume for the first nine months increased, primarily driven by higher volumes in the first six months, also in anticipation of potential tariff changes. The third quarter's international intermodal volume remained flat.

Looking ahead, the company anticipates that ongoing tariff volatility and growing trade pressures will lead to softer import demand in intermodal markets in the near term. This economic backdrop contributes to a mixed outlook for overall manufacturing activity, although output is still expected to grow. The company maintains a cautious outlook for the remainder of 2025 due to these dynamics, along with competitive activity stemming from its merger announcement.

Sources

• "Automotive volumes increased in both periods, driven by shippers increasing volume in anticipation of potential changes to tariffs, growth with existing customers and the absence of customer production issues seen in the prior year." (Third Quarter 2025 Form 10-Q, page 33)

• "International volume was flat in the third quarter but increased for the first nine months primarily driven by increased volume during the first six months in anticipation of potential changes to tariffs." (Third Quarter 2025 Form 10-Q, page 33)

• "Looking into our intermodal markets, we expect softer import demand in the near term. This reflects the impact of tariff volatility and growing trade pressures." (Ed Elkins, Chief Commercial Officer, earnings call)

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Analysis

Tariffs have increased costs and introduced uncertainty within the automotive industry, affecting Ford, its suppliers, and dealers. The company recorded an adverse net EBIT impact of $700 million in the third quarter of 2025 directly attributable to tariffs. These costs influenced segment performance, with Ford Blue's EBIT reflecting higher costs, including tariffs, and Ford Model e experiencing increased tariff-related costs that partially offset other cost improvements.

Ford has a receivable of approximately $1 billion on its balance sheet as of September 30, 2025, for tariffs paid but not yet refunded, related to preferential tariff treatment and import adjustment offsets. The timing of these refunds is uncertain and depends on the tariff category. Recent policy changes by the U.S. administration have expanded opportunities for tariff offsets. Ford anticipates these changes will allow it to offset a greater portion of its parts tariffs.

The company's strategy includes leveraging its U.S. manufacturing volume to generate credits that offset tariffs on imported auto parts. Tariffs that create a more level playing field for imported medium and heavy-duty trucks are viewed positively, as Ford builds all its Super Duty trucks in the United States. Ford expects these factors to contribute to a reduced net tariff headwind for the full year.

Sources

• "In the third quarter of 2025, Ford's net EBIT impact related to tariffs implemented or revised in 2025 was about $700 million, including the impact of preferential tariff treatment and import adjustment offset amounts." (Filing)

• "Credit based on our large U.S. manufacturing volume will allow us to offset tariffs on imported auto parts we need for our strong American production and manufacturing base." (Jim Farley, context earnings call)

• "Given the recent announcements by the administration, we now expect tariffs will be $1 billion net headwind for 2025, down from $2 billion." (Sherry House, context earnings call)

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Analysis

During the year, tariffs, combined with policy downturns in the U.S., affected the company's Renewable Diesel segment. These factors contributed to challenges such as rising feedstock costs, which negatively impacted the segment's profitability for a portion of the year. However, recent market rationalization, including softening fat prices in the fourth quarter, has enabled Renewable Diesel margins to return to positive adjusted EBITDA.

Looking ahead, the company recognizes ongoing policy conflicts. Policies aiming for an increased Renewable Volume Obligation (RVO) are counterbalanced by measures that may decrease renewable fuel generation from foreign feedstocks. This dynamic is expected to lead to higher RIN prices in the future. The company highlights that predicting the exact impact of these policies and tariffs on profitability remains challenging.

No specific quantifiable financial impact of tariffs on the overall company's net income, revenue, or margins was provided in the reporting period.

Sources

• "We've seen throughout the year, there's just been a lot of impact from tariffs and policy downturns in the U.S." (Company - Other Officer)

• "On DGD, you're exactly right. We've seen throughout the year, there's just been a lot of impact from tariffs and policy downturns in the U.S. We've seen fat prices rising for the better part of the year. I think just most recently, we are seeing enough rationalization in both biodiesel and renewable diesel where fat prices are finally starting to soften. With that lower fat price, we've seen DGD margins return back to positive EBITDA. That's a good sign. That's a good sign for the fourth quarter." (Company - Other Officer)

• "We still have a lot of policy that appears to be in conflict of increased RVO but decreased generation because of foreign feedstocks. Those are all going to be things where you're trying to raise the number but make it more difficult to generate. That usually is going to mean higher RIN prices. I think that is the question that everyone's got to get settled on." (Company - Other Officer)

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Analysis

Trade policies and tariffs have created increased volatility in global markets, negatively impacting the company's results of operations and cash flows. The ultimate impact of these tariff policies and other evolving global trade measures remains uncertain. The company actively monitors global trade developments to identify necessary actions to maintain competitiveness and works with regulatory bodies to address anti-competitive behavior.

Anti-dumping duties have led to a significant reduction in Chinese MDI imports into the United States, which typically account for approximately 20% of the U.S. MDI market. This reduction in imports, down about 80%, has resulted in some additional volume for the company.

However, these anti-dumping duties have also led to Asian exporters redirecting volumes into other regions, specifically Europe, Middle East, Africa, and India (EMEAI). This redirection is expected to cause margin compression for the Industrial Intermediates & Infrastructure segment.

The company's global asset footprint and product portfolio are positioned to capitalize on purchasing trends that favor local products and materials. This strategy aims to mitigate potential tariff headwinds by aligning with customer preferences for regionally sourced goods.

Sources

• "At the time of this filing, the ultimate impact of tariff policies and other evolving global trade measures, coupled with existing macroeconomic challenges, is uncertain." (Filing)

• "As it relates to anti-competitive oversupply activities, our teams continue to be actively engaged in conversations with governments around the world to mitigate impact, aggressively defend local production, and to ensure a fair trade environment remains." (Jim Fitterling)

• "In September, the U.S. Department of Commerce made a preliminary finding concluding that MDI dumping was occurring by Chinese producers in the United States. Chinese imports account for about 20% of the MDI market here. Industry imports are reporting that on top of the pre-existing duties that were already there, the market for Chinese imports is dissipating quite quickly. We are seeing some starts of additional volume." (Karen S. Carter)

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Analysis

Roper Technologies' Technology Enabled Products (TEP) segment experienced a disruption due to a new copper tariff, which took effect on August 1. This tariff caused short-term operational issues for Neptune, a business within the TEP segment. The impact was primarily observed in the third quarter of 2025, contributing to organic revenue growth for the TEP segment of 6.1%.

In response to the new copper tariff, Neptune implemented surcharges to mitigate the increased costs. This strategy, however, led to temporary delays in order timing as the company engaged in renegotiations with customers regarding open orders. These adjustments to pricing and subsequent discussions temporarily slowed the sales process, but the company clarified that these orders are delayed rather than lost.

The tariff-related impact on Neptune, combined with other market factors such as a government shutdown affecting the Deltek business, contributed to a revision of the company's overall organic revenue guidance for the full year 2025. The guidance was adjusted from a range of 6% to 7% down to approximately 6%, reflecting the combined effects of these headwinds. For the fourth quarter of 2025, organic growth in the TEP segment is expected to be in the low single-digit area, partly attributed to the timing issues at Neptune.

Sources

• "The new copper tariff that took effect on August 1 caused some short term disruption. Neptune responded by implementing surcharges to offset the tariffs impact, which temporarily slowed order timing." (Neil Hunn, earnings call)

• "Looking ahead to the fourth quarter, we expect organic growth in the low single digit area given the very difficult prior year comp and the timing we discussed at Neptune." (Neil Hunn, earnings call)

• "I mean, the reason that was a little rough this quarter were the two reasons we talked about: the commercial activity at Deltek with the government shutdown, and then this tariff related impact at Neptune." (Neil Hunn, earnings call)

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Analysis

Tariffs emerged as a headwind impacting Honeywell's financial performance in 2025. These incremental tariffs contributed to cost inflation, which temporarily outpaced the company's pricing actions. This effect was particularly noted within the Aerospace Technologies segment.

Management has initiated actions to mitigate the ongoing impact of these tariffs. For 2026, the expectation is that pricing strategies will align more effectively with tariff-related costs, thereby reducing the negative influence observed in 2025.

Specifically for the Aerospace Technologies segment, tariff pressures on costs contributed to margin contraction in 2025. However, this pressure is projected to decrease in 2026 as pricing adjustments are implemented, and tariffs stabilize.

Sources

• "While 2025 was affected by a number of headwinds, including heightened economic uncertainty, incremental tariffs and significant cost inflation, we have already begun taking action to position our Aerospace and Automation businesses to return to underlying margin expansion in 2026." (Vimal Kapoor)

• "For the full year, margins are expected to be approximately 26% as volume leverage is more than offset by transitory integration headwinds from the Case acquisition and caused inflation from tariff pressures temporarily outpacing pricing." (Mike Stepieniak)

• "In 2026, as pricing aligns with tariff costs, OE shipments of electronic solutions recouple with build rates and integration costs from the Case acquisition subside, Aerospace margins are well positioned to increase from 2025 levels." (Mike Stepieniak)

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Analysis

Lam Research Corporation's financial performance has been affected by tariffs and trade restrictions, particularly those impacting shipments to China. In the September 2025 quarter, the company experienced higher tariff-related spend, which partially offset the increase in gross margin as a percentage of revenue.

Looking ahead, the recently announced 50% affiliate rule, which restricts shipments to certain domestic China customers, is projected to significantly impact future revenue. This rule is expected to reduce revenue by approximately $200 million in the December 2025 quarter and by approximately $600 million for calendar year 2026.

These trade restrictions are anticipated to shift the company's regional revenue mix, with China expected to account for less than 30% of overall revenues in calendar year 2026. Tariffs are also projected to continue acting as a headwind to gross margin in both the December 2025 quarter and throughout calendar year 2026.

Sources

• "The increase in gross margin as a percentage of revenue in the September 2025 quarter compared to the June 2025 quarter was primarily a result of favorable changes in customer mix, partially offset by reduced factory efficiencies, higher tariff-related spend, and increased material costs." (Lam Research Corporation 2025 Q3 10-Q 18)

• "Our December quarter guidance does contemplate roughly a $200 million revenue impact from the recently announced 50% affiliate rule, restricting shipments to certain domestic China customers." (Company - Other Officer, Earnings Call)

• "Currently, we expect this rule to impact our calendar year 2026 revenues by approximately $600 million." (Company - Other Officer, Earnings Call)

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Analysis

Tariffs led to significant increases in acquisition costs during the third quarter of 2025. In response, the company made adjustments to selling prices. These pricing adjustments resulted in a same-skew inflation of just over 4% for the third quarter, which was observed across both the professional and do-it-yourself (DIY) segments of the business.

The increase in price levels, partly driven by tariffs, contributed to a modest decline in DIY customer transaction counts during the third quarter. This pressure was primarily concentrated in certain larger ticket job categories, suggesting a potential deferral of some purchases by DIY consumers.

The company employed several mitigating strategies to manage the tariff impact. These included diligent supply chain management, optimizing distribution operating efficiencies, and making timely pricing adjustments. These efforts allowed the company to maintain consistent gross margins despite the rising acquisition costs. Furthermore, the company highlighted its long-standing strategy of supplier diversification, noting a global supply base and the use of multi-sourcing for most product lines, including proprietary brands. The company's exposure to China, as a percentage of Cost of Goods Sold, has decreased over time and continues to fall.

For the fourth quarter, the company expects a mid-single-digit same-skew benefit from current pricing adjustments. The company believes it has absorbed the majority of the cost impacts from the tariffs currently in effect. Future guidance for sales and gross margin does not factor in substantial impacts from additional tariffs beyond those already reflected in current product acquisition costs. However, the company remains prepared to navigate any potential future acquisition cost increases resulting from new tariff provisions.

Sources

• "As we've anticipated coming into the third quarter, we saw a significant ramp in tariff-driven acquisition cost increases and made appropriate adjustments to selling prices." (Brad Beckham, CEO)

• "The contribution to same-skew inflation during the third quarter, which was felt evenly on both sides of the business, was just over 4%." (Brad Beckham, CEO)

• "As expected, we realized significant acquisition cost pressure from tariffs in the quarter. The impact from product cost inflation in the quarter closely mirrored in timing the adjustments we made in pricing." (Brent Kirby, President)

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Analysis

Tariffs continue to affect the company's financial performance, specifically impacting its global supply chain, cost structure, and profitability. The energy generation and storage business experienced a relatively larger impact from the current tariff regime compared to the automotive business.

In the three months ended September 30, 2025, increased tariffs contributed to a higher average cost per unit in automotive sales revenue. Similarly, in the energy generation and storage segment, higher tariffs contributed to increased cost of revenue despite lower raw material costs and manufacturing efficiencies from the Shanghai Megafactory ramp.

To mitigate these challenges, the company is implementing cost reduction efforts, production innovation, process improvements, logistics optimization, and is focusing on operating leverage, vertical integration, and supply chain localization. The ramp-up of the Shanghai Megafactory assists in avoiding tariffs for non-U.S. demand.

Looking forward, changes in trade policy are expected to impact the company's global supply chain cost structure and availability, potentially affecting vehicle production and facility expansions. Higher tariffs on imports and retaliatory tariffs could adversely affect consumer spending and demand for durable goods and related services. Additionally, import tariffs by the US government and provisions of the OBBBA may increase battery cell expenses and consumer costs, negatively impacting demand. These policy changes could also necessitate adjustments to project timelines, influencing cash flow and capital expenditure expectations.

Sources

• "The current tariff regime will have a relatively larger impact on our energy generation and storage business compared to our automotive business." (Filing)

• "Cost of automotive sales revenue increased $1.62 billion, or 10%, in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due a net increase in deliveries year over year as discussed above and a higher average cost per unit due to lower fixed cost absorption, an increase in tariffs and sales mix, partially offset by lower material costs." (Filing)

• "The total tariff impacts for Q3 for both businesses were in excess of $400 million, generally split evenly between them." (Company - Other Officer)

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Analysis

Tariffs negatively affected Boston Scientific's gross profit margin during the third quarter and first nine months of 2025, partially offsetting gains from higher margin products. The company anticipates incurring incremental costs due to tariffs on U.S. imports and increased tariffs by China on U.S. manufactured products.

For the full year 2025, the company expects an approximate $100 million tariff headwind to its adjusted gross margin. Boston Scientific plans to monitor the evolving tariff situation and explore mitigation opportunities, although there is no guarantee that these efforts will fully offset the impacts. The annualization of tariffs in 2026 is expected to be a further headwind.

Changes in trade and tariff policies also represent a general risk factor, potentially causing a material adverse impact on business operations and results due to further tariff increases or other trade restrictions.

Sources

• "In the third quarter of 2025, the primary factors that impacted gross profit margin were increased sales of higher margin products, partially offset by increased levels of tariffs and other period expenses." (Filing, page 47)

• "We continue to anticipate incurring incremental costs under the current schedule of tariffs on U.S. imports announced by the U.S. government, as well as the subsequent increase in tariffs introduced by China on U.S. manufactured products. While some of the announced tariffs have been adjusted and the U.S. and other governments continue negotiations on such measures, these and any further tariff increases on our products by the U.S., China or any other country or region, as well as sanctions or other measures that restrict international trade, could have a material adverse impact on our business operations and results." (Filing, page 46)

• "As a result of our Q3 performance, we now anticipate full-year adjusted gross margin to slightly improve versus 2024, inclusive of an approximate $100 million tariff headwind for the full year, unchanged versus previous expectations." (Jon Monson, Earnings Call)

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Analysis

The impact of tariffs, combined with related foreign currency effects, served as a partial offset to the increases in both GAAP operating income margin and adjusted operating income margin during the third quarter of 2025. This indicates a negative pressure on overall profitability.

Specifically, the Analytical Instruments segment experienced a decrease in its segment income margin. This decline was primarily attributed to the impacts of tariffs and associated foreign exchange fluctuations in the third quarter of 2025. The trend extended to the first nine months of 2025, where the decrease in segment income margin for Analytical Instruments also stemmed from tariffs, related foreign exchange, unfavorable volume mix, and strategic investments, although partially mitigated by strong pricing realization.

In the third quarter of 2025, the company's adjusted EPS showed a favorable deviation of $0.11 compared to prior expectations. This improvement was due to a lower actual impact from tariffs and related foreign exchange than had been previously assumed.

The company's guidance for the full year 2025 incorporates the tariffs currently in place, including recent increases in tariff rates between the U.S. and Europe. For the fourth quarter of 2025, the company expects the tariff assumptions to remain largely consistent with previous guidance, without anticipating a significant new increase in impact.

Management has noted that some pharma and biotech customers are engaged in reshoring activities within the U.S. to mitigate exposure to potential tariffs. This strategy involves establishing new facilities and expanding existing ones, which is expected to benefit the company's channel, bioproduction, and analytical instruments businesses. New construction impacts are largely projected for 2027-2028, while leveraging the company's pharma services network for increased U.S. volume offers a more immediate and cost-effective solution for customers.

Sources

• "GAAP operating income margin and adjusted operating income margin increased in the third quarter of 2025 due primarily to very strong productivity improvements, partially offset by strategic investments, the impact of tariffs and related foreign currency effects, and unfavorable business mix." (Filing)

• "The decrease in segment income margin was driven by the impacts of tariffs and related foreign exchange." (Filing)

• "$0.11 of that beat was from a lower impact of tariffs and related FX than had been assumed in the prior guide." (Stephen Williamson)

• "As we talk about the actual environment, which is a part of how they think about the world and the decisions they make, there's a quiet confidence actually that they're going to be able to navigate the government policies effectively. You're seeing that in some of the announcements that have been made on pricing, as well as on reshoring more activity in the U.S. in terms of not being exposed to potential tariffs." (Marc N. Casper)

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Analysis

Tariffs have increased the company's cost of revenues, impacting its gross profit margins. During the three months ended September 30, 2025, and the nine months ended September 30, 2025, these costs rose by $22 million and $37 million, respectively.

The company manufactures a significant majority of its instruments and accessories in Mexicali, Mexico. Most of these products qualify under USMCA and have not been subject to recently imposed tariffs. However, the majority of its endoscopes, manufactured in Germany, and certain raw materials and sub-assemblies imported from China, are subject to tariffs. These tariffs are expected to adversely affect the product cost of the da Vinci Xi surgical system in China.

Indirectly, some suppliers have incurred incremental tariffs and have passed these additional costs to the company. While direct impacts from specific tariff actions on steel, aluminum, critical minerals, and semiconductors have not been material to date, the long-term effects of current and future tariff actions are difficult to predict. The escalation in tariffs and new country-specific trade requirements could also lead to tariff-related inflation in raw material costs and potential supply shortages as the company navigates adjustments in logistics and transportation routes.

For the full year 2025, the company expects tariffs to impact its pro forma gross profit margin by approximately 70 basis points, with a range of plus or minus 10 basis points. The company anticipates that increases to its cost of revenues due to tariffs and other trade measures will continue into the fourth quarter of 2025.

Sources

• "During the three and nine months ended September 30, 2025, tariffs and other trade measures have increased our cost of revenues by approximately $22 million and $37 million, respectively." (Management's discussion and analysis)

• "The lower product gross profit margin for the three months ended September 30, 2025, was primarily driven by the impact of tariffs." (Management's discussion and analysis)

• "Based on the announced and implemented global tariffs as of the date of this report, and assuming such tariffs remain in place, we expect increases to our cost of revenues driven by tariffs and other trade measures to continue to increase into the fourth quarter of 2025." (Management's discussion and analysis)

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Analysis

The company incurred an increase in material and freight costs totaling $1.1 billion due to tariffs in the third quarter of 2025. This was a primary factor contributing to an unfavorable cost impact in GM North America's EBIT-adjusted results during the period.

For the full year ending December 31, 2025, the company estimates the gross impact of tariffs to EBIT-adjusted could range from $3.5 billion to $4.5 billion. However, the company expects to mitigate approximately 35% of this gross tariff impact through various initiatives, including go-to-market strategies, footprint adjustments, and cost reductions.

Mitigating strategies also include cash tariff offset reimbursements, with $300 million received in the third quarter of 2025, and these reimbursements are expected to continue into the fourth quarter. Further modifications to tariffs relevant to the automotive industry, announced in October 2025, are anticipated to result in a material positive benefit to the company's fourth quarter 2025 business results and in future quarters. These changes include an expansion and extension of the import adjustment offset program, which broadens the scope of eligible parts for import adjustments, making U.S.-produced vehicles more competitive.

The company is also undertaking actions to reduce its long-term tariff exposure through strategic investments aimed at increasing domestic sourcing and manufacturing. This includes investments to onshore production at plants in Tennessee, Kansas, and Michigan. Specifically, the company plans to more than double Chevrolet Equinox production at its Fairfax assembly plant in Kansas and is investing close to $1 billion to build new V8 engines in New York. The company expects its net tariff exposure in 2026 to be lower than in 2025, despite an additional quarter of tariff impact.

Sources

• "This included a gross tariff impact of $1.1 billion, which was a little less than we had expected due to lower import volumes from Korea. We were able to offset more than 30% of this amount through go-to-market, footprint, and cost initiatives." (Paul Jacobson, earnings call)

• "Based on the current tariff environment, we estimate that impacts to EBIT-adjusted could range from $3.5 billion to $4.5 billion for the year ending December 31, 2025." (Filing)

• "The administration's recently announced expansion of the MSRP tariff offset broadens the scope of parts eligibility for the program and will make U. S. vehicle production more competitive. Additionally, this supports tariff mitigation in 2026 and beyond while we work to adjust our supply chains." (Paul Jacobson, earnings call)

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Analysis

Tariffs imposed by the U.S. and other countries impacted the company's cash flows during the nine months ended September 28, 2025. The company experienced an approximate $350 million impact on its cash flows.

The company anticipates recovering a substantial portion of this impact over time. However, near-term cash flow volatility is expected due to the timing difference between tariff payments and when such costs may be refunded or recovered.

To mitigate the effects of current and future tariffs, the company is pursuing several strategies. These include seeking exclusions, utilizing drawbacks and refunds, recovering costs through product pricing adjustments, and securing alternative sources of materials or products. Additionally, the company aims to qualify for duty-free treatment where applicable. Despite these efforts, these actions may not fully mitigate the impact of tariffs.

Excluding the near-term cash flow impact, the company does not expect the tariffs to have a material adverse effect on its results of operations or financial condition over the long term. Tariffs have contributed to supply chain challenges, affecting the availability and cost of materials, including rare earth minerals.

Sources

• "Tariffs that have been enacted or expanded by the U.S. or other countries had an impact of approximately $350 million on our cash flows for the nine months ended September 28, 2025. However, we expect a substantial portion of this impact to be recoverable over time." (MD&A - Recent Developments in Trade and Regulatory Policies)

• "At this time, excluding the near-term cash flow impact, we do not believe that the tariffs announced by the U.S. or actions taken in response to these tariffs by other countries will have a material adverse effect upon our results of operation or financial condition over the long term." (MD&A - Recent Developments in Trade and Regulatory Policies)

• "We are pursuing available options to fully or substantially mitigate the impact of the increased tariffs or any future tariffs, including seeking exclusions, through drawbacks, refunds, recovering the costs in the pricing of our products, securing alternative sources of materials or products, or, in certain cases, qualifying for duty-free treatment." (MD&A - Recent Developments in Trade and Regulatory Policies)

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Analysis

The company acknowledges the volatility in the global tariff environment, stemming from existing and potential changes in U.S. and international trade policies. Despite this, the impact of new tariffs on its financial performance was not material during the first nine months of 2025.

To manage potential supply chain challenges and mitigate the effects of the changing tariff environment, the company relies on its diversified production network, a global supplier base, and a U.S. manufacturing presence for nicotine pouches. Its supply chains are predominantly contained within their respective trade regions, which helps reduce exposure to external disruptions. The company continues to actively monitor global tariff developments, evaluate changes, and adapt its operations and compliance practices.

Sources

• "While the global tariff environment is volatile, as a global company with a broadly diversified production, a worldwide supplier network, including an established U.S. manufacturing base for nicotine pouches, and existing supply chains that are largely self-contained within their respective trade regions, we currently believe we are well-positioned to mitigate potential supply chain challenges and that the changing tariff environment will not have a material impact on our business." (Filing)

• "During the first nine months of 2025, the impact of new tariffs on our business was not material to our condensed consolidated financial statements." (Filing)

• "We expect the global tariff environment to remain volatile throughout 2025 and 2026. PMI is actively monitoring developments, evaluating all changes, and adapting operations and compliance practices accordingly." (Filing)

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Analysis

Tariffs impacted the company's financial results in the third quarter of 2025. Both the Collins Aerospace and Pratt & Whitney segments experienced headwinds to operating profit due to higher tariffs.

The company's consolidated free cash flow for the third quarter of 2025 included $220 million in tariff-related impacts.

Management is pursuing mitigation strategies to offset tariff impacts. These include utilizing available exemptions or exclusions, evaluating operational and supply chain changes, and increasing prices where feasible.

For the full year 2025, the company's updated outlook incorporates a previously discussed net tariff headwind of $600 million, with this expectation remaining unchanged. Based on current conditions, the company does not believe that the tariffs or counter-tariffs will have a material adverse effect on its overall results of operations, financial condition, or cash flows.

Sources

• "Our results for the quarter and nine months ended September 30, 2025, reflect our best estimate of the impact of the tariffs then in effect." (Filing)

• "During the quarter, Collins saw about $90 million of headwind from year-over-year tariffs, actually the same number that Pratt saw for the quarter." (Neil Mitchill)

• "Cash flow for the quarter also included approximately $275 million for powder metal related compensation and $220 million of tariff related impacts." (Neil Mitchill)

• "Within this updated outlook, there is no change to the net tariff headwind we discussed on our last earnings call." (Neil Mitchill)

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Analysis

Tariffs negatively impacted 3M's operating margins and earnings per share in the third quarter of 2025. Gross tariff and foreign currency impacts partially offset benefits from growth and productivity for both GAAP and adjusted operating margins and EPS. Increases in the cost of sales for the third quarter and first nine months of 2025 were primarily due to foreign currency impacts, tariffs, and the exit of manufactured PFAS products, partially offset by procurement and logistics savings.

To mitigate the impact, 3M implemented pricing actions. The company generated an incremental 20 basis points of price specifically to cover a portion of the tariffs.

Looking ahead, the company anticipates continued tariff impacts. However, it plans to leverage productivity improvements across its supply chain and general and administrative expenses to more than offset these and other factors, including growth investments and stranded costs, to drive margin expansion in 2026.

Sources

• "Both GAAP and adjusted operating margins reflect benefits from growth and productivity (outside of special items), and lower restructuring costs, partially offset by growth investments, as well as gross tariff and foreign currency impacts." (MD&A)

• "The incremental 20 basis points is to cover a piece of the tariffs. Keep in mind the net tariff impact for the company is around $0.1. Gross is $0.2." (William Brown, Company - CEO)

• "Operating income grew by approximately $175 million in constant currency, including an approximately $325 million benefit from volume growth, broad-based productivity across supply chain and G&A, and lower restructuring costs, partially offset by about $50 million of growth investments as planned and $100 million from tariff impact and stranded costs." (Anurag Maheshwari, Company - Other Officer)

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Analysis

Geopolitical and policy-related pressures, including tariffs, have influenced Danaher's operating environment. The company noted these pressures required leveraging the Danaher Business System to drive productivity gains across its businesses.

In the bioprocessing segment, equipment order growth has been affected as customers awaited clarity on the policy environment before finalizing investment decisions. Despite healthy project pipelines, this uncertainty prevented translation into firm orders.

However, discussions with senior pharma leaders indicate increasing confidence regarding capital investment decisions. This confidence stems from most-favored-nation negotiations progressing to workable solutions and the tariff situation stabilizing to become more predictable. This shift suggests a potential improvement in capital investment decisions going forward.

Regarding China, a localization policy offers a 20% pricing rebate for locally manufactured products. Danaher anticipates having a substantial portion of its diagnostic businesses, including equipment and reagents, localized by the end of 2025. The company views this strategic localization as an advantageous position rather than a short-term challenge.

Sources

• "Our team is leveraging the Danaher Business System to mitigate ongoing geopolitical and policy related pressures and drive meaningful productivity gains across our businesses." (Rainer Blair)

• "What I've noted here in these discussions with some of the senior pharma leaders is that there's more confidence now in making these investment decisions as some of these most favored nation negotiations are becoming to workable solutions and the tariffs are starting to dial in and remain somewhat consistent." (Rainer Blair)

• "We think that we're very well positioned here as it relates to localization. By the end of the year, much of our diagnostic businesses, whether that's equipment or reagents, will be localized. That degree of localization plays well across the portfolio. While we don't talk about percentages of localization, we think that we're very well positioned here and view this actually as advantageous as opposed to a short term headwind." (Matt McGrew)

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Analysis

Tariffs, combined with broader market softness, have affected the company's forest product and chemical markets. This led to some customers rationalizing their production in these segments.

Volume for both the forest product and chemical markets decreased by 7% compared to the prior year. Despite these volume declines, positive core pricing in these segments helped to mitigate the overall revenue decreases.

Tariff impacts are a continuing watch item for the intermodal business. While intermodal volumes have softened in recent weeks, this trend also aligns with typical seasonality.

Uncertainty regarding future trade policies and the specific nature of tariffs is influencing investment decisions. This suggests an ongoing impact on overall business conditions.

Sources

• "Broader market softness and tariffs continue to impact our forest product and chemical markets, where we have some customers that have rationalized production." (Kevin Boone, EVP and Chief Commercial Officer)

• "For both, volume was down 7% compared to the prior year, but positive core pricing has mitigated revenue declines." (Kevin Boone, EVP and Chief Commercial Officer)

• "Tariff impacts and general consumer demand remain watch items." (Kevin Boone, EVP and Chief Commercial Officer)

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Analysis

The company's UTOP margin guidance for the full year 2025 incorporates the assumption of existing tariffs. This includes higher tariffs in Switzerland that were implemented following the half-year reporting period.

The company did not provide specific quantitative details on how these tariffs impacted revenue, costs, or overall profitability. The tariffs are factored into the maintained UTOP margin expectation of at or above 16%.

Sources

• "The UTOP margin is still expected to be at or above 16% as we invest for growth, and this assumes tariffs currently in place today, including the higher tariffs in Switzerland that came in after the half year." (Anna Manz (CFO))

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Analysis

Abbott's gross profit margin has been affected by tariffs. For the first nine months of 2025, higher costs, including tariffs, partially offset the favorable impact of gross margin improvement initiatives, leading to an increase in the GAAP gross profit margin percentage. Specifically, in the third quarter of 2025, the adjusted gross margin profile decreased compared to the prior year, primarily due to the impact of tariffs.

Abbott has implemented mitigation strategies to address the impact of tariffs. These include dedicated teams across its businesses focused on driving constant ideation and execution throughout supply chains and operations to improve gross margin. Management notes progress in tariff mitigation efforts, with ideas also feeding into broader gross margin expansion initiatives.

Looking ahead, management anticipates that tariffs will continue to have a full-year effect in the next fiscal year. However, the company expects ongoing mitigation efforts to help maintain its gross margin profile.

Sources

• "The increase in the first nine months of 2025 reflects the favorable impact of gross margin improvement initiatives, partially offset by higher costs, including tariffs, and the unfavorable impact of foreign exchange." (Financial Review -- Results of Operations)

• "Regarding other aspects of the P&L, the adjusted gross margin profile was 55.8% of sales, which, as expected, reflects a decrease compared to the prior year due to the impact of tariffs." (Phil Boudreaux (Executive Vice President, Finance and Chief Financial Officer))

• "We've been able to work hard this year to be able to mitigate the impacts of tariffs as they have full year effect next year." (Robert Ford (Chairman and Chief Executive Officer))

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Analysis

The company reported that uncertainty regarding tariffs was a factor in a previous quarter, contributing to customer hesitation in making concrete capacity building plans. This uncertainty has since decreased, which the company indicates has positively influenced customer decision-making.

Looking forward to 2026, the company expects a significant decline in its total net sales from China. This reduction is attributed to the prevailing trade environment, including the impact of export controls, national security regulations, and tariff announcements. The business levels in China observed in 2024 and 2025 were characterized as unusually high, and the company expects a return to more normalized levels.

This anticipated decrease in China-related business is expected to have a dilutive effect on the company's gross margin. Products largely shipped to China, such as immersion systems, typically carry favorable gross margins. Consequently, a lower volume of these sales would negatively impact the overall margin profile. The company also anticipates that its Deep UV (DUV) business will be lower in 2026 due to these dynamics in China, while its EUV business is projected to increase.

Sources

• "One element of the uncertainties that we called out at that point in time was also the uncertainty around tariffs that was out there. I think there is more clarity on that front right now. But that's unclarity also prevented customers from being very concrete as to what exactly they were going to do and whether we're going to build their capacity." (Roger Dassen, context earnings call)

• "On the other hand, we expect China customer demand, and therefore our China total net sales in 2026 to decline significantly compared to our very strong business there in 2024 and 2025." (Christophe Fouquet, context earnings call)

• "So as you know, what we ship to China today to a very large extent is immersion. Immersion comes with a very good gross margin. So less China business would be dilutive on that front." (Roger Dassen, context earnings call)

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Analysis

During the third quarter, U.S. tariffs did not result in significant incremental pricing adjustments for the Fashion and Leather Goods division. The improvement in this segment was primarily attributed to increased traffic and volume, not tariff-related pricing changes. For the U.S. market, particularly Champagne distribution, there was a potential for some stocking in anticipation of tariffs. However, the company indicated that tariffs were not the primary factor driving overall progress in the U.S. market during the period. The company expects moderate price increases in the U.S. in upcoming periods to compensate for tariffs.

Sources

• "On your question regarding the U.S. and price, if we look at Fashion and Leather Goods overall, the improvement, the sequential improvement, was mostly made through improvement of traffic and volume. Price was not very different from Q2 and mix was around neutral." (Company - CEO)

• "Is there an anticipation of tariffs or not? There might be, as you said, in some cases in the stocking of the distribution of Champagne, but we also saw some real improvement in Champagne, which is not what we see in Cognac. Overall, I'm not sure tariff is the main explanation of the progress that we've been seeing in the U.S." (Company - CEO)

• "Probably in the U.S. there will be moderate price increase in order to compensate for tariffs." (Company - CEO)

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Analysis

Tariffs introduced during the reporting period contributed to general market nervousness. This factor impacted the booking window for the latter part of the summer. The main cabin revenue segment experienced some effects from this situation.

Sources

• "When the spring swoon was happening and everybody got a little nervous when tariffs were introduced, that was the booking window for the latter part of the summer. That had some impact on main cabin as well." (Company - CEO)

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Analysis

PepsiCo's third quarter 2025 results for PepsiCo Beverages North America (PBNA) were impacted by tariffs. This impact specifically affected the segment's margin expansion during the quarter.

The company anticipates an expansion of PBNA's margin in the fourth quarter, which is expected to result in a positive margin expansion for the full fiscal year. This indicates that the Q3 tariff impact was considered a temporary headwind, with a recovery expected in the subsequent period.

Sources

• "You know, the Q3 was impacted by tariffs." (Company - CEO)

• "We see already in Q4 an expansion of the margin again to complete a positive margin expansion for the full year." (Company - CEO)

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