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![zacktanzx Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::910896822855462912.png) ZTan [@zacktanzx](/creator/twitter/zacktanzx) on x XXX followers
Created: 2025-07-03 20:22:25 UTC

$VFC $NKE $LULU #MathSession
How much of a price increase does $VFC need to raise to prevent margin erosion ? Let's do the math.

Assuming XX% tariffs and X% gets taken off from negotiations with suppliers, coupled with some effect of the depreciation of the Vietnamese DONG.  

We will be left with an effective XX% tariff.    

These tariffs however only affect import price AKA the COGS not final retail price.  

You also have to keep in mind this XX% tariff only affects sales within the UNITED STATES.   

So you would only apply the effective tariffs on America's share of the COGS Margin.  

Assuming :  
Effective Tariff rate : XX%  
VFC's US% sales : XX%  
VFC's COGS Margin : XX% 

Actual Price Increase Needed = Tariff Rate * US sales share pct * COGS Margin  

Actual Price Increase Needed = XX% * XX% * XX% = XXX %

I understand this is a simplified model but don't expect stupid figures like 10-20% price increases over the board you see people spouting on X.

Firms might also get creative with pricing and raise prices for their premium products which has inelastic demand by 10-20% and keep basic pairs at 1-3% inline with inflation expectations.

Not financial advice.


XXXXX engagements

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**Related Topics**
[lulu](/topic/lulu)
[nke](/topic/nke)
[dong](/topic/dong)
[tariffs](/topic/tariffs)
[$vfc](/topic/$vfc)
[stocks consumer cyclical](/topic/stocks-consumer-cyclical)
[$nke](/topic/$nke)
[$lulu](/topic/$lulu)

[Post Link](https://x.com/zacktanzx/status/1940868755623493971)