Dive Brief:
- Boot Barn is moving production for its exclusive brand products away from China to countries with lower tariffs like Cambodia, India and Vietnam, CEO John Hazen said during a May 14 earnings call.
- The retailer used to source more than half of its exclusive brand goods from China over five years ago. Boot Barn lowered that number to 24% for fiscal 2025, Hazen said, and expects its ongoing efforts to further reduce exposure to 12% in fiscal year 2026.
- “We are estimating that China will only produce approximately 5% of exclusive brand goods in the second half of fiscal '26 and in fiscal '27,” the CEO told analysts. Boot Barn’s exclusive brand products made up nearly 39% of its consolidated sales in fiscal 2025, per a 10-K filing.
Dive Insight:
Boot Barn has strategized to reduce supply chain risks for its exclusive brand products in recent years. While a big part of its strategy includes a shift in sourcing mix, the retailer is also partnering with its factories to manage pricing changes that could pressure margins.
Third-party vendors informed Boot Barn of plans to up prices by mid-single digits, effective this summer, Hazen said. He added that Boot Barn isn’t paying tariffs on goods purchased from third-party vendors, but instead faces price increases.
To help manage costs, Boot Barn is also re-evaluating its inventory mix and has been canceling product orders with low merchandise margins due to tariffs, per an earnings presentation.
“We have been reviewing each individual style by cost, making decisions line-by-line to determine whether or not we should cancel an order, order more, hold pricing, or raise pricing, all in an effort to maintain the momentum of our exclusive brands,” Hazen told analysts.
The footwear retailer also pushed to frontload about $20 million worth of inventory to “beat the tariffs,” CFO Jim Watkins said during the call. He added that within the past few weeks, the team has been working to get “ahead of the curve” and keep orders moving.
Watkins added that as of the call, Boot Barn’s fiscal year 2026 outlook is based on a 30% tariff from China, 10% global tariff rate and 0% tariff on goods from Mexico.
Boot Barn’s anticipated $8 million tariff impact for fiscal 2026 is expected to be felt in the second half, Hazen said. But with tariff negotiations still ongoing, Boot Barn feels like it's “already in a pretty good spot.”
