Acme United is Prepared for Tariffs

During the fourth quarter conference call, Chairman and CEO of Acme United Corporation (US: ACU – $40.85) Walter C. Johnsen addressed anticipated challenges related to tariffs. He mentioned that the Company is ready as it has proactively diversified its sourcing and production to mitigate tariff impacts.

For example, over the past eight years, it acquired no less than 10 companies with manufacturing sites in the U.S. and Canada, including facilities in Vancouver, Washington; Rocky Mount, North Carolina; Santa Ana, California; Nashville, Tennessee; and Brooksville, Florida.

The Company implemented a dual sourcing strategy in countries such as Egypt, Thailand, India, and the Philippines to reduce reliance on any single country or region. For example, the Company sources gauze and tape from Egypt, leveraging the country’s robust cotton industry.

Acme also increased its inventory in advance of the tariffs so that it has time to adjust and implement the new prices.

Finally, to offset potential tariff costs, Acme United plans to collaborate with suppliers to reduce expenses, enhance productivity, and implement price adjustments while maintaining customer value.

Acme United’s strategic acquisitions, product innovations, and operational efficiencies position the Company for continued growth. Despite potential challenges such as tariffs and market volatility, Acme’s diversified sourcing and strong financial performance provide a solid foundation for future success. The Company has strong liquidity and is positioned for further acquisitions and growth in 2025.

We reiterate our buy recommendation for Acme United Corp. with a price target of $54.80 for 2025, which is 34% above today’s stock price.

Smallcaps.us Advice: Buy	Price Target: $54.80	Latest Company Report (pdf)
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