I just listened and saw the video about MNRO and tires. They are projecting a big positive for MNRO when tires are only 3-4% of their sales. Imagine the impact for PBY? I really hadn't looked at this perspective from the same angle but I would propose a big positive for PBY. All the imported tires from China in PBY inventory will get marked up 35% when tariff goes into effect....the new selling price. They just got a big freebie on margin on all these tires. The thing that wasn't discussed is that now that cheaper imports will have higher prices, their competitors can also raise prices. Everything in PBY's inventory will get a nice bump. I suspect we will see a large multi-million dollar accounting adjustment for quarter ending October to reflect inventory adjustments.........this could blow away all the current forecasts....talk about a short squeeze. Secondly, this is a built in sales increase that should help to finally get PBY in the black. Things are looking up. DaninFW
Tire Tariff ??? How could this be a tax on import tires when most of the tire retailers spread the tax across the board. PBY raised their prices approx. 12% on all tires, U.S and Import made tires. Will someone please Buy Something Made in The U.S.
The maufacturer pays the tariff and PBY pays 35% more than they used to for the same tire. Everything they own in their inventory that they bought for 35% less is now worth 35% more. Real simple. If they did raise prices 12% across the board you confirmed my suspicion. The cost on other tires did not escalate so they are now seeing 12% improved margins as well. This is not an inventory adjustment like the other is......just more profit. It all hits the bottom line the same but it's how they are accounted for. The profit on inventory markup can actually be taken even before the inventory is sold. It's actually just marking up an asset to current value. DaninFW