Newsletter · · Ashutosh Agarwal

Tariff Refunds Land as Nike Loses Its Cool and Luxury Splits in Two - Brands: Luxury, Sneakers & Apparel - Week of August 9, 2026

Supreme Court tariff refunds are padding apparel earnings for the week of August 3 to 9, 2026, while LeBron James tells Nike it has lost its cool and Bernstein's Luca Solca argues luxury has split into two speeds with only the top one moving.

Brands: Luxury, Sneakers & Apparel

Week of August 3–9, 2026: Tariff Refunds Land as Nike Loses Its Cool and Luxury Splits in Two

Two big things happened in the podcasts this week, and they pull in opposite directions. On the good-news side, the tariffs that spooked this whole sector all spring have been struck down by the Supreme Court, and the US government is now writing refund checks, fast. On the worrying side, the sneaker and activewear crowd is clearly out of favor: Nike is being told by its own biggest star that it has lost its cool, Under Armour just cut its outlook, and Lululemon is fighting see-through leggings and a founder revolt. Meanwhile the luxury debate has hardened into a single, clean idea: the industry has split into two speeds, and only one of them is moving.

Here is what people were actually saying.

1. The tariff story flipped, and refunds are padding this quarter's profits

Last week the mood was grim: the assumption was that tariffs on clothes and shoes were here to stay. This week that reversed. On Squawk on the Street (Aug 7), CNBC laid out the scale of it: the Supreme Court struck down the "Liberation Day" import duties, and the administration has already refunded roughly $100 billion, with another ~$29 billion in the pipeline, more than 75% of the ~$166 billion it owed companies, "much faster than anyone anticipated." Over 250,000 refund requests were filed.

Those refunds are quietly inflating earnings this quarter. On the same program: Under Armour booked about a $70 million benefit, which pushed its gross margin up nearly six percentage points versus a year ago; Apple saw more than $2 billion (worth about $0.11 a share); Disney about $100 million; and e.l.f. Beauty about $50 million. (Amazon was also cited, in the hundreds of millions.)

The most useful voice was Columbia Sportswear CEO Tim Boyle, interviewed live on the same show. Columbia got a $78 million refund, "we have gotten virtually all of our duties back that we paid," he said. But before anyone assumes shoppers will see lower prices, note what he plans to do with the money: nothing flashy. Columbia's goods are "pre-sold to retailers" and bundled in its own stores, so "we can't change the prices on this stuff. So we basically ate the cost of the tariffs in 2025." The refund goes to strengthening the balance sheet and paying back vendors who helped absorb last year's hit.

Boyle also poured cold water on the idea that tariffs will bring shoe and clothing factories back to America. Footwear and apparel are "virtually impossible to make in the United States," he said, because the raw materials and the skilled tailoring "moved to Asia decades ago," some of Columbia's partner factories employ 100,000 people. Tariffs, in his telling, don't reshore anything; they "inflate the price of our products." And the real problem isn't the level of tariffs, it's not knowing what they'll be: Columbia is selling goods to retailers now for delivery next year, so "we know what we can sell it for... but we really, in many ways, don't know what we're going to pay." He described the US shopper as "more fragile today than in past periods" but "still quite strong," and said business outside the US is running stronger than at home.

Two smaller sourcing notes rounded out the tariff theme. On The Business of Agriculture (Aug 3), a proposed "Great American Cotton Plan" would dangle tax credits, 24% for US-made, 18% for free-trade-partner countries, 12% for everyone else, to try to pull garment sourcing home. The backdrop shows why that's hard: the US grows about 14 million bales of cotton a year but exports 85–90% of it, then re-imports the equivalent of about 18 million bales as finished clothing. And on Inbound Logistics (Aug 5), the Port of Los Angeles' Gene Seroka noted China's share of the port's imports has fallen from about 60% to 40% as sourcing shifts toward Southeast Asia, even as total volume grew.

Why it matters: the near-term cost cloud over apparel and footwear just lifted, and it's showing up as a one-time earnings tailwind rather than lower prices for you and me. But the two structural points survive: you can't easily make this stuff in America, and the on-again-off-again nature of the rules is itself the risk companies are pricing.

2. Sneakers and activewear: the bear case is back, and it's personal for Nike

The clearest sector read came from Closing Bell Overtime (Aug 6), where the framing was blunt: athletic wear is simply not in favor right now. Shoppers are "looking for something new," snapping back from the comfy-clothes binge of the COVID years. In that environment even a good operator has "a huge obstacle to overcome."

Nike is the poster child. The stat that landed hardest: Nike's stock is down roughly 50% since Elliott Hill took over as CEO in October 2024. The analyst on air (Michael Binetti) said Hill "had a bigger job than what he thought," he's had to bring people back and fix China, and that the real test comes at Nike's analyst day in Oregon in November, when management lays out its longer-term plan and "the stock market" decides "whether it believes this is a workable plan." On China specifically, the point was that homegrown brands Li-Ning and Anta are "making waves" and local shoppers increasingly prefer them, another force working against Nike there.

Then came a remarkable bit of unpaid criticism from Nike's own marquee athlete. On Boardroom with Rich Kleiman (Aug 4), LeBron James, a Nike athlete for two decades and, in the host's words, "one of the 2 or 3 biggest faces that Nike has ever had," was asked directly about the brand's slump. His diagnosis was culture, not product specs: "You got to get back into the roots. You got to get back to being out in the inner city," with people "in the communities talking to these younger generations." The core problem, he said, is that Nike has lost its cool: "it's always been a cool factor to put on a pair of Nikes... we can't lose our cool." The host put it more bluntly still: "they got to make cool shit again." It's a cultural comment, not a stock call, but hearing it from LeBron is its own kind of signal.

Under Armour gave the sector its hard catalyst. On Bloomberg Intelligence (Aug 7), analyst Poonam Goyal walked through the company's cut to its sales outlook, which it blamed on soft demand worldwide. She's seen this movie before, "I've been through this turnaround story several times over the past two decades," and flagged one genuine positive: inventory fell just 3%, in line with the sales decline, so the shelves aren't clogged. But she pushed back on the "weak consumer" excuse: Adidas and Nike are "doing pretty fine in North America," helped by their scale and by the World Cup, which Under Armour largely sat out. Two things make UA different, she said: it's mostly an apparel brand (not footwear-led like Nike and Adidas), and it lost its signature endorser when Steph Curry left. Management's answer is to go "back to the basics" with product, its showcase item is a "bouncy T-shirt" pitched as gym-to-bar-to-everyday wear, but Goyal was skeptical you can win in this category on product alone: "in athleisure you do need that athlete endorsement, that athlete credibility." She also made the trade-down point plainly: the higher-end customer is doing better than the middle and the low end.

Lululemon, told through a segment on Bloomberg Intelligence's Aug 5 episode, is a company that "basically invented leggings as we know it" now stuck in a genuine slump. The details:

  • Leadership gap: no CEO for several months; Heidi O'Neill starts in September. She's a former top Nike executive who led product and Nike's direct-to-consumer push under John Donahoe, notably the same era in which Nike cut ties with wholesale partners and leaned too hard into lifestyle sneakers.
  • A quality problem that keeps recurring: back in 2013 Lululemon pulled almost 20% of its women's pants off shelves for being see-through; earlier in 2026 it had to pause its "Get Low" leggings for the same reason. Its push into sneakers "hasn't really panned out," and a Disney collaboration drew criticism.
  • A founder who won't stay quiet: Chip Wilson ran a proxy campaign, then settled in May for two board seats and quarterly meetings with the incoming CEO, in exchange for keeping quiet for 18 months.
  • Squeezed from both ends: premium upstarts Alo and Vuori are taking share at the top with fresher product, while Target and Old Navy take the budget shopper. Underneath it all is price, as one colleague summed up, "they love Lululemon, but it's just too expensive for a lot of people." (Lululemon, like Nike, was also named in California lawsuits over "strikethrough" pricing that allegedly showed discounts off reference prices that weren't real recent selling prices, per Selling on Giants, Aug 4.)

Now the counterweight, because it's not all gloom. New Balance got a full profile on Ecommerce On Tap (Aug 4), and it's the standout winner. The private company did about $6.5 billion in global sales in 2023 (up 23% year over year, and nearly double its 2020 level), and CEO Joe Preston guided to roughly $7.6 billion for 2024, with "several consecutive years of growth in the high teens" while the broader athletic market was much weaker. The hosts' argument for how the once-mocked "dad shoe" became fashionable: this was "not primarily an act of reinvention, but... the monetization of strategic patience." New Balance never abandoned what it was, the gray suede, the width sizing, the US and UK factories, its running credibility, and layered culture on top: collaborations with Aimé Leon Dore, Dior, Miu Miu and Joe Freshgoods, and athletes chosen for fit rather than fame (Shohei Ohtani, Coco Gauff, Kawhi Leonard), about 320 athletes globally as of 2024. For scale: the hosts pegged its likely net margin at 12–18% (roughly $0.9–1.4 billion of profit) and mused that as an acquisition it could be worth $11–25 billion, still a fraction of Nike's ~$46 billion in revenue, but no longer a niche player. No deal or IPO is actually on the table; the buyer talk (LVMH, Adidas, private equity) was hypothetical, and the hosts worried any big acquirer would strip out the very quirks that make it special.

Two more names to watch, both from Closing Bell: Salomon, the trail-and-fashion brand, just launched a US distribution deal with Foot Locker and is "going to push a lot out," with the analyst calling it a share-gainer against Nike and Adidas. And Lululemon got a more optimistic read there too, credited with a "pipeline of very differentiated products coming" including new running shoes to protect its running credibility. The recurring theme: the brands winning right now are the ones offering something fresh, Salomon, On, Hoka-style challengers, "brands that we never heard about when it was all Nike and Adidas all the time," and they "are not going away easy."

3. Luxury now has two speeds, and only the top one is moving

The most valuable luxury conversation of the week was Fashion People (Aug 7) with Bernstein analyst Luca Solca, who is about as close to a house view as this sector has. His single organizing idea: "the consumer audience has been polarizing."

The top end is fine. Brands aimed squarely at the very rich, Loro Piana, Brunello Cucinelli, Zegna, "are doing well," because financial markets are up and wealthy people feel good and spend. The trouble is everyone else. In a stat worth sitting with, Solca said "90% of luxury consumers spend between 1,000 and 1,500 euros per year. And nevertheless, they represent 55% of the total market. It's with these consumers that the battle is on." And these middle, aspirational shoppers are quietly changing what they buy: "we see more value in a piece of jewelry at $3,000, $4,000, $5,000 than we see value in the same price in a bag." That one shift, he argued, explains the gap between strong jewelry sales at Richemont (Cartier, Van Cleef) and the mere +1% growth in LVMH's fashion-and-leather-goods business, even though Dior is reviving under Jonathan Anderson and Chanel under Matthieu Blazy. Star designers aren't enough, in other words; the missing lever is price.

His most striking example was Kering's Gucci. By cutting prices and repositioning Gucci a notch down-market, Solca said, "they have found exponential price elasticity behavior from consumers," and he cited Chinese mall operators reporting "quite a few first-time Gucci buyers." But he was careful not to call it a fix: cheapening a brand's image happens fast, and rebuilding it "takes years... if not outright impossible." Price is only one of the "four Ps"; this is "buying time" for incoming designer Demna, not a strategy by itself. He read the same message into Coach, Ralph Lauren and Burberry: "we possibly went overboard in the post-COVID price increases. We need to adjust." And he doesn't expect China's middle class to ride to the rescue.

On LVMH specifically, Solca was admiring: Louis Vuitton has been "managed exceedingly well," using the World Cup and Formula One to recruit new customers now that China "is not providing an army of middle-class consumers anymore." He sees a real internal debate this fall over whether Vuitton should push further upmarket or become slightly more accessible, and "the market is saying the latter." The catch, and it's the whole tension of luxury: broaden too far and you risk ubiquity, which "is the kiss of death for luxury," because what you're really selling is the feeling of being special.

The numbers behind all this came from Equity Mates' "The Decade Ahead" (Aug 5), a big-picture look at the luxury economy. A few figures that stick:

  • Global luxury spending was about $1.6 trillion in 2025, roughly flat on 2024, and forecast (by Bain) to reach $2.5–3.1 trillion over the next decade.
  • The market is getting top-heavy fast. The ultra-wealthy (spending over €20,000 a year) now make up about 46% of the personal-luxury market, up from ~30% in 2019. On a broader definition, Boston Consulting Group found that 0.1% of luxury consumers drive 37% of total spending, averaging about €360,000 a year each, and 85% plan to spend the same or more.
  • At the same time the customer base is shrinking, from roughly 400 million luxury shoppers to 330 million since 2023, exactly the aspirational drop-off Solca is describing.
  • LVMH captures the strain: it has posted 16 straight quarters of slowing sales growth, from +44% year-over-year in December 2021 to roughly -5% by late 2025. Full-year 2025 revenue was €80.8 billion (down 5%) and profit €10.9 billion (down 13%); the stock is off about 25% this year and more than 50% from its peak.
  • The healthy names look very different. Hermès did €16 billion in 2025 revenue, up 9%, at a 41% recurring operating margin, "pure play scarcity." Ferrari delivered about 13,000 cars, grew revenue 7%, and has an order book stretching to the end of 2027. Richemont is the only major that's up this year (+5%), thanks to jewelry. Prada is down 16% and Christian Dior down 23%.
  • One flashing warning light: Hermès handbag prices are up 50–70% since 2019. Luxury goods can behave like "Veblen goods" (higher price can mean more desire), but the hosts noted that as a category, "margins have shrunk... pricing power isn't there, and customers have been leaving."

4. The bigger idea: experiences are eating luxury

The Equity Mates episode's throughline is worth pulling out on its own, because it reframes where the money is going. Since 2023, experiences have been the only part of luxury that's grown. In 2025, luxury experiences rose about 3% while personal goods fell 2%, with cruises up 10% and high-end food and dining up 8%.

The vivid illustration: two courtside seats to the NBA Finals at Madison Square Garden went for $280,000 (about $140,000 each) in 2026, versus roughly $4,000 in inflation-adjusted terms in 1999, a 35x jump the hosts flatly attributed to "rich people having more money," amplified by wealthy buyers from all over the world now competing for the same scarce seats. Their named ways to play the theme: Formula One Group, MSG Sports and MSG Entertainment, Live Nation (which owns Ticketmaster and did about $25 billion in revenue), the ultra-luxury cruise operator Viking Holdings (up 40% year-to-date), and concierge-for-the-rich outfit Ten Lifestyle Group. Tellingly, several US "luxury goods" ETFs have quietly shut down over the past 18 months, a small sign that the pure-goods trade has fallen out of fashion.

Underneath it all is a wealth backdrop that keeps compounding: by the hosts' figures the world is minting about 89 new ultra-high-net-worth individuals a day, the number of billionaires has roughly doubled in a decade (about 1,810 in 2016 to 3,428 in 2026), and there have been 45 new AI billionaires this year alone. The risk they flagged is political, wealth-tax proposals in California and the UK, but concluded it's a "watch it, don't act on it" concern for now.

This also explains the geographic story. With China's luxury market having fallen as much as 20% in 2024 (its steepest drop since 2011) and still weighed down by a property crisis and deflation, the offset has been an AI-fueled American wealth boom: Equity Mates cited US sales up sharply at the strong brands, Hermès +17%, Prada +15%, Cartier +18%, and noted the top 5% of US households grew their luxury spending 10.5% in 2024 even as overall US luxury spending fell. The one small China bright spot came from Columbia's Boyle, who called China "strong" for his brand, but off a tiny base, so read it as company-specific rather than a turn in Chinese demand.