By Evie Liu
Food companies like Hershey, Brinker International, and Vita Coco saw their stocks jump on Monday as investors cheered the tariff rollback on certain food and agricultural products.
Since April, many imported products have been subject to a minimum 10% global tariff -- or more, in some countries' case. The food industry has called on the Trump administration to exclude certain products that the U.S. couldn't produce at home or heavily rely on imports.
Last Friday, President Donald Trump issued an executive order to exempt hundreds of imported agricultural goods, including beef, coffee, cocoa, and coconuts, from the tariffs -- a result of the administration's progress on various trade deals, according to the White House.
The rollback is a relief for many food companies, from restaurant chains to packaged-food makers, that have seen substantially more expensive input costs in the past few months.
"President Trump's proclamation to reduce tariffs on a substantial volume of food imports is a critical step ensuring continued adequate supply at prices consumers can afford," said the Food Industry Association, a trade group for grocery chains and food wholesalers, in a statement.
The National Restaurant Association also applauded the tariff exemption on selected agricultural products, saying in a statement that the move "will help stabilize supply chains and ease cost-pressures for restaurants and their customers."
Stock in Vita Coco, which sells coconut water and other beverages, shot up 7% on Monday. The majority of the company's supply comes from the Philippines and Brazil, where its tariff rates stand at 19% and 50%, respectively. Management increased prices in July to cover the tariff impact.
In a Monday statement, Vita Coco said upon the latest exemption, the average tariff rate for its products arriving in the U.S. is expected to decrease from the previously announced 23%, to about 6% based on current sourcing and product mix.
On Monday, Bank of America upgraded its rating for Vita Coco stock from Neutral to Buy, and raised the price target from $48 to $54. The analysts previously estimated that tariffs would add about $37.5 million to the company's costs in 2026. That has now been removed.
"Tariffs were the majority reason for our prior Neutral rating, we have been confident in Vita Coco's topline trajectory, but the magnitude of potential tariffs and uncertainty related to trade policy prevented us from upgrading shares until now," wrote research analyst Peter Galbo.
Vita Coco was a recent Barron's stock pick . Reporter Todd Chanko argues that the company's growth potential in international markets and expansion into non-coconut-based beverages isn't fully priced into the stock.
Stock in Brinker International, owner of restaurant chain Chili's, also jumped 7.9% on Monday. Despite strong sales at Chili's, the company has warned of profit margin pressure due to high commodity costs, especially for beef and shrimp, partially due to tariffs.
Beef prices have already been rising for months as dry weather in cattle-producing states led to a historically small herd in the U.S. Recent tariffs on Brazil have led to less beef imports, further shrinking the supply and pushing prices higher.
In its latest earnings report, Brinker said tariffs have boosted commodity costs more than expected in 2025 and started to pinch its profit. The restaurant operator raised prices in October and said it anticipates doing it again in January. The tariff rollback would reduce those cost pressure.
Brinker stock might also be rising because of Stifel analyst Chris O'Cull's bullish note on Monday. Following an investor meeting with management, the analyst believes the influx of new customers and stable visit frequency at Chili's would keep sales and traffic growth resilient.
Chocolate giant Hershey, which has been significantly impacted by elevated cocoa costs, is another beneficiary of the tariff rollback. Shares are up 1.9% in Monday trading.
In late October, Hershey said it expected 2025's tariff expenses to be $160 million to $170 million, primarily on imported cocoa beans. The company has lowered its earnings guidance earlier this year on the back of cocoa inflation and tariff risks.
In a statement last week, Hershey said it's "pleased" by the administration's decision: "Cocoa is not grown in the United States and is essential to our U.S.-based manufacturing operations. This exemption strengthens our domestic supply chain and enables us to continue investing in American manufacturing."
The tariff relief could boost Hershey's earnings per share in 2026 by more than $1, JPMorgan analysts estimated in a Monday note. "It is possible that Hershey opts for higher investments next year in response to the more favorable cost environment," the analysts wrote.
Write to Evie Liu at evie.liu@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 17, 2025 14:40 ET (19:40 GMT)
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