Trade Latest: Boston Beer, Deckers Earnings Show Tariff Effects

Boston Beer said the impact of tariffs would likely be smaller than previously thought. (Dreamstime)

The impact of President Donald Trump’s tariffs is showing up in companies’ second-quarter earnings reports. It’s not as bad as many would have thought three months ago.

To be sure, the taxes on imports are still set to raise companies’ costs and weigh on profits—evidence so far suggests that it’s corporate America that’s paying for the tariffs most, rather than foreign firms or U.S. consumers. That may change in the future if companies raise prices to pass on the costs. And with the Aug. 1 deadline for getting trade deals with partners approaching next week, broad tariff rates look likely to be higher than they were in the second quarter.

But investors have been pleasantly surprised at the relatively small effects of the tariffs so far.

Deckers Outdoor , the maker of Ugg and Hoka shoes, declined to give guidance for more than the current quarter because of trade uncertainty. But the guidance it did give wasn’t bad—it sees earnings per share rising to $1.50 to $1.55 from $0.93 last quarter. The stock was up 13% in premarket trading Friday.

Boston Beer , the maker of Sam Adams, said that the tariffs would cost the company between $15 million to $20 million for the full year. That’s a lot, but less than the $30 million it had reckoned with before. Its shares jumped 7.5% before the market opened.

Chip maker Intel’s results were ahead of analyst estimates and the company said that the numbers were helped by lower tariffs than feared. The company still has problems—it’s laying off about 15% of its workforce, and its shares were slipping 7.8% Friday morning—but tariffs aren’t one of the bigger ones.

A week from today, tariff rates are set to revert to higher ones for countries that haven’t yet secured a deal. After getting to an agreement with Japan earlier this week, a pact with the European Union, the biggest U.S. trading partner, and India are expected to be announced soon.

Write to Brian Swint at brian.swint@barrons.com