By Connor Hart

President Trump's proposed tariffs roiled markets this week, injecting a dose of skepticism into an already volatile market.

Corporations have responded in a variety of manners. Some have raised the alarm, warning that the trade war would cost jobs, result in lost profit and require major shifts in manufacturing strategy. Others have expressed confidence that they have enough levers to pull to offset any potential effect. Many are taking a wait-and-see approach, as the tariff picture becomes clearer.

Hilton Worldwide Holdings Chief Executive Officer Chris Nassetta shrugged them off as part of a larger trade-negotiation strategy. "That doesn't mean there won't be tariffs," he said Thursday. "But my guess is that we will end up, in most cases, in a place where we get some form of trade deal done that will not involve major tariffs."

The tariff news came ahead of a busy week of earnings. Here is what some companies said on their quarterly earnings calls.

Ford Motor

CEO Jim Farley estimated that the automaker would be able to manage a few weeks of the proposed tariffs given the rate and flow of its products. If they persist, though, the company would have to make some major strategy shifts.

The Dearborn, Mich., company already has plans to expand some of its U.S. plants to mitigate higher import costs, but long-term tariffs would likely require building new plants in the U.S. Farley adds that he believes Trump's administration, as well as other congressional leaders, are committed to strengthening the U.S. auto industry, not hurting it.

Clorox

Chief Financial Officer Kevin Jacobsen said the consumer-products company is less exposed to the effect than others due to the setup of its supply chain, but plans to take unspecified steps to limit its vulnerability.

"Right now, it is a little difficult to know exactly what the impact is because it's changing so dynamically," he said. It didn't factor the tariff effect into its outlook.

Chipotle Mexican Grill

The burrito chain expects to face a financial effect should tariffs be enacted, but excluded the potential hit in its outlook.

Chief Executive Scott Boatwright said the company has been working to source its avocados and other supplies from beyond Mexico. It now sources goods from Colombia, Peru and the Dominican Republic, though about half of its avocados come from Mexico.

Tyson Foods

Tyson Foods believes it can quickly move its supply chains to avoid the effect of tariffs, which were factored into the meat company raising its revenue outlook for the year. "Mexico is a large trading partner for us," Chief Executive Donnie King. "What we would do, whether it would be pork or whether it would be chicken, is we would find other markets."

The meat supplier won't make any rash decisions, though, as there are still a lot of details that need to be worked out surrounding the tariffs, he said.

O'Reilly Automotive

The autoparts retailer is unsure how its suppliers, competitors and customers will respond to tariffs and didn't incorporate the effect into its outlook. Brent Kirby, president of the chain, said that based on the last round of tariffs in 2018 and 2019, the industry will behave rationally in response to the raised costs.

"We fully expect this dynamic to continue and anticipate our industry will have both the ability and the resolve to appropriately pass-through any increased tariff cost," he said.

Mattel

Mattel expects higher profit and revenue this year thanks in part to the steps it has taken to limit the effects of tariffs, including relying on its global supply chain and potentially raising prices. The maker of Hot Wheels and Barbie has spent years building out a supply chain that isn't overly reliant upon any one country, Chief Executive Ynon Kreiz said.

The company produces less than 40% of its toys in China, whereas the industry average is around 80%, and Mexico accounts for less than 10% of the company's global production. It will consider raising prices if tariffs are enacted, though Kreiz said the company will assess the market as the tariffs play out and adapt accordingly.

E.l.f. Beauty

E.l.f. Beauty cut its full-year sales outlook as beauty sales continue to decelerate, a forecast that doesn't include the effects of the new 10% tariff on goods imported from China. The cosmetics company faces high exposure in the country, as it is where more than 80% of its products are manufactured.

"We believe we have a successful playbook to leverage from 2019 when tariffs move to the 25% level," Chief Financial Officer Mandy Fields said. "This included supplier concessions, cost savings and select price increases."

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

February 07, 2025 14:52 ET (19:52 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.