Reliance Worldwide Corporation (ASX:RWC) shares dropped nearly 7% to A$4.29 after the company flagged a weaker outlook, including a projected US$25 million to US$30 million hit to earnings from new US tariffs.
Chief executive Heath Sharp said lower interest rates to date had failed to stimulate demand across its core markets, while tariff-related uncertainty continued to weigh on sentiment in the United States. “In addition, uncertainty around tariffs has weighed on consumer and business sentiment in the US,” he noted.
Citi equity analyst Samuel Seow observed that the anticipated tariff headwind was slightly lower than earlier expectations of up to US$35 million. “Overall, RWC are flagging an overarching objective to maintain gross margin dollars by fully offsetting tariffs through price and diversifying supply chains,” he said.
Given the uncertainty, Reliance limited its guidance to six months, forecasting weaker US sales and flat Asia-Pacific performance, both of which came in below consensus expectations.