Safety apparel maker Lakeland reshuffles global production amid trade tensions

Lakeland Industries, a smaller company that makes safety apparel, reported its fiscal-2025 fourth-quarter and full-year results yesterday, April 9, and announced a global production overhaul to mitigate the impact of potential trade wars. Following a year of aggressive acquisitions globally, the company now finds itself at the center of intensifying trade tensions.

In its earnings report for fiscal 2025, ended January 31, Lakeland detailed plans to redistribute manufacturing across its facilities worldwide to reduce tariff exposure.

“The tariffs the current Presidential administration has imposed on a growing number of countries and trading partners are on the top of everyone’s mind… While developments on the ground seemingly change by the day, we are focusing on production shifts to incur the lowest possible tariffs on our products,” the company’s management stated.

For instance, Lakeland’s plant in Mexico will handle orders from the company’s U.S. facility destined for Latin America and Canada. The U.S. facility, in turn, will fulfill certain partner orders for the American market (but only after completing product certification).

Production is also shifting out of China and to Vietnam. U.S. import duties on Chinese goods now stand at 125%, while tariffs on Vietnamese imports are 46%. Importantly, the White House has delayed implementation of the Vietnam tariffs for 90 days. Lakeland says a significant share of U.S.-bound goods is already produced in Vietnam, and the company is “closely monitoring” U.S.-Vietnam trade negotiations.

Lakeland further noted that it had proactively built up U.S.-based inventory of Asian-made products ahead of the trade shocks.

On April 2, Trump announced a 10% base tariff on all foreign goods, which has already taken effect and has not been called off. Additional duties were also planned, dubbed “reciprocal tariffs,” including a 20% levy on EU imports, though these are now on hold. Several countries have retaliated: China imposed an 84% levy on U.S. imports, while the EU has approved 25% tariffs on a range of U.S. products.

The budding trade wars sparked a stock market selloff that lasted four sessions. However, equities rallied yesterday after Trump backed down and announced a 90-day freeze on the “reciprocal” tariffs for countries that had not retaliated against the U.S. tariff increases.

Lakeland manufactures and sells protective clothing and accessories for industrial companies and first responders. Its customers include firms in the oil, chemical, automotive, and transportation sectors, as well as fire and rescue services.

The company has manufacturing plants in China, Vietnam, and Mexico. Last year, it made several acquisitions: European fire, military, and police boot maker Jolly; German peer LHD Group Deutschland and its subsidiaries in Hong Kong and Australia; and most recently, in December, U.S.-based firefighter apparel maker Veridian. Each acquisition came with its own customer base and markets, for which their respective products were certified as required.

Alongside these updates, Lakeland reported a 34% increase in net sales for fiscal 2025 to $124.7 million. However, it still posted a net loss of $18.1 million for the year, versus a net profit of $5.4 million the year prior. The fourth-quarter earnings per share came in at negative $0.03 — way off analyst expectations of positive $0.29 per share, according to Yahoo Finance.

The earnings announcement sent Lakeland shares tumbling. After surging 11% in the regular session yesterday, Lakeland fell 18% after the closing bell to $15.00 per share. Shares are down another 3% in premarket trading today, April 10.

According to MarketWatch, four analysts currently cover Lakeland, and all rate it a “buy.” Their average target price of $28.50 per share implies nearly 56% upside versus the last closing price.