Kohl, JC Penney and Home Depot executives denounce rates

The Kohl's, JC Penney and Home Depot executives were united in their message against additional taxes on imports from China, while they were talking to analysts during the conference call post-profit Tuesday.

Kohl & # 39; s, which saw its stock dip to its lowest level in 52 weeks after cutting its earnings estimates, partly blamed lower forecasts for lower tariffs.

"At the moment, these tariffs mainly affect our products from China in our home and accessories sector," Financial Director Bruce Besanko told analysts. "China is not our biggest source of goods, but it's a big one – it's just over 20% of our goods."

Kohl's director, Michelle Gass, described the situation as "a very unstable situation," adding that Kohl "worked closely with our suppliers to ensure that collectively we had a solid plan. "

The White House has threatened to hit another 25 percent of tariffs on about $ 300 billion worth of Chinese goods, including clothing and footwear. That's after a third set of tariffs, impacting on goods such as furniture and fixtures, including handbags, came into effect earlier this month.

"We expect to have an impact on the gross margin, which partly explains the reduction in the margin outlook compared to what we had previously," said Kohl's chief financial officer Besanko. "There are two components to that – one is this tariff increase."

At the same time, his competitor Penney – who nearly doubled his net losses during his first fiscal quarter – said that new rates could hurt his internal brands, just as Macy's CEO did. , Jeff Gennette, said last week. Retailers have turned to private label brands to try to increase their profitability. But tariffs will mitigate the benefits of this approach as retailers are forced to absorb the costs themselves.

"In the future, we expect a more significant impact on our private and domestic brands if the fourth potential tranche of tariffs takes effect on all Chinese imports," Penney CEO Jill Soltau told analysts.

The tariffs have so far had a "minimal impact" on Penney's business, with the three rounds already coming into effect, Soltau said.

At the same time, the Home Depot retailer of home goods said that the $ 200 billion Chinese goods tariff – which went from 10% to 20% – has an impact of "about a billion dollars "on his business, but that it is" manageable ".

However, the last 25% rate series is not included in the retailer's latest forecast. CFO Carol Tome said, "We are currently studying the impact of these rates and, therefore, we have not included them in the current forecast."

After disappointing results, Kohl's shares fell more than 11% on Tuesday, which is their worst day since Jan. 5, 2017, when the stock lost 19.02%. Penney shares fell 9%. Home Depot shares fell by less than 1%.

Chinese President Xi Jinping said this week that China is entering a "new long march, and we have to start all over again!" Although he did not mention the United States nor the ongoing trade war, these remarks are interpreted as a clear sign that China will not give way to the Trump administration anytime soon.

Also this week, more than 170 shoe retailers, including Nike and Under Armor, have sent a letter to President Donald Trump stating that 25% tariffs could lead some families to pay nearly 100% duty on shoes. .

– CNBC Maggie Fitzgerald and Gina Francolla contributed to these reports.