(Reuters) – Newell Brands’ CEO said on Friday it is aiming to reduce its reliance on Chinese suppliers to minimize the impact of U.S. import tariffs, following its unexpected quarterly loss forecast.
The Sharpie maker, which partly manufactures and sources products from China, said it plans to bring down the cost of finished goods imported to the U.S. to less than 10% from around 15% of the company’s total cost of goods sold by the end of the year.
Earlier this week, U.S. president Donald Trump imposedsweeping 10% tariffs on all Chinese imports, sparking a new trade war between the world’s two largest economies.
“The company has been shifting production out of China and into alternate geographies through both existing and new suppliers,” CEO Chris Peterson said on a post-earnings call on Friday.
Shares of the Graco children’s product maker slumped 27% on Friday after it forecast a first-quarter loss of between 6 cents and 9 cents per share, compared with analysts’ estimates of a profit of 3 cents, according to data compiled by LSEG.
It also forecast annual net sales to decline in the range of 2% to 4% versus analysts’ estimates of a 0.7% decline. The company added these forecasts do not factor in the impact of tariffs.
Last year, ahead of U.S. elections, Peterson told Reuters the company was moving some production of kitchen appliances out of China and has relocated manufacturing for its writing business to Tennessee as it faces “uncertainty” on tariffs.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Vijay Kishore)
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