Foot Locker (FL) - Get Report shares fell to a one-year low Friday after the retailer reported weaker-than-expected first quarter earnings, and trimmed its full-year profit guidance, as the prospect of tariffs on China-made goods looms over the sports shoe and apparel industry.
"If you have tariffs effecting a lot of shoe companies, say like Nike (NKE) - Get Report , for example, they're either going to be forced to eat the costs or raise prices. If they raise prices, I might be less inclined to shop at Foot Locker. So that's one thing that you want to keep an eye on," Marks said.
Marks added, "There is this bifurcation going on right now in retail that if you're a retailer and you can mitigate the tariffs' impacts and you can keep customers in your stores, you're gonna win. And that's target. Whereas on the other hand, if tariffs are going to impact your business and you might be struggling to maintain those consistent comps, quarter over quarter, you're going to get hit. And that's what you're seeing today."