Tariffs and Trade Restrictions: Build-A-Bear Names Cost Impact
Companies described current tariff effects, limits to sourcing changes and uncertainty over the timing of tariff refunds.
Build-A-Bear Workshop Inc (BBW), which imports the vast majority of its products, changed its description of the latest U.S. tariffs from “would have significant impact” in April to “continues to have an impact” in June, making the effect on its cost structure and product margins explicit as a current condition.
Other companies also described effects already experienced. Flex Ltd. (FLEX), a company with a global operating model, said trade measures “have been, and are expected to continue to be, disruptive” to its business. Its warning covered production costs, customer relationships, demand and its competitive position. V.F. Corp. (VFC), which imports products for sale, said tariffs and retaliatory actions had resulted in higher costs and were continuing to trigger responses from affected countries.
Changes in sourcing carried continuing exposure. Build-A-Bear said it had reduced China sourcing by shifting primarily to Vietnam, yet remained subject to “substantial potential exposure to tariffs” in both April and June. Furniture manufacturer Flexsteel Industries Inc. (FLXS) said it sourced certain finished products primarily from Vietnam and had significant manufacturing operations in Mexico. Its warning linked an inability to reduce acquisition costs or pass through price increases to potential harm to sales volume, earnings and liquidity; higher prices could also weaken its competitiveness against furniture manufacturers with less tariff exposure.
Manufacturing and purchasing adjustments had their own limits. Daktronics Inc. (DAKT), which manufactures products, said it sought to mitigate trade-policy effects through pricing, manufacturing-location changes, supplier diversification and product redesign, but might fail to fully offset increased costs or act quickly enough. Forgent Power Solutions, Inc. (FPS), a buyer of electrical steel, carbon steel, aluminum and copper, warned that tariffs and procurement restrictions could increase material prices or restrict access. It also said an inability to pass material-price increases to customers could significantly affect margins, and that it might be unable to react quickly and effectively to policy changes.
Customer responses remained conditional in SiTime Corp. (SITM), a supplier whose customers face trade-policy exposure. The company repeated the same warning in May and August: tariffs could reduce demand or extend sales cycles as customers assessed their own increased costs or decreased revenue. It also retained the warning that missed delivery expectations or poorly received price increases could cause reputational harm.
ImmunityBio, Inc. (IBRX), which depends on service providers and access to export and sales markets, made a narrower wording change. In May, it described uncertainty over U.S. trading relationships as involving trading partners “most significantly China”; its August description omitted that qualifier. The company retained its warnings that tariff-policy changes could increase manufacturing and sourcing costs, decrease demand and disrupt supply chains. The geographic emphasis eased without a corresponding change to those stated risks.
Applied Materials Inc. (AMAT), which has a significant portion of its supply chain in China, identified restrictions on technology exports to China and retaliatory measures as sources of supply-chain challenges. It also warned that authorities could require local suppliers or partnerships, or the licensing or transfer of sensitive data or intellectual property. The company said many of those challenges were present in China and Korea, markets representing a significant portion of its business.
V.F. Corp. identified a separate uncertainty after tariff costs had been incurred: the timing of any tariff refunds legally owed to the company depends on the U.S. government establishing processes and systems. It also warned that import bans and sourcing laws could add compliance costs and delays for itself, suppliers and customers. Its refund disclosure supplied no timetable for recovery.