Navigating Trade Headwinds: How Delta, Conagra, and Levi Are Testing Corporate Resilience Ahead of Key Earnings

As the July 10 earnings season approaches, investors will scrutinize three major companies—Delta Air Lines (DAL), Conagra Brands (CAG), and Levi Strauss (LEVI)—to gauge their resilience in the face of escalating trade tensions and macroeconomic uncertainty. These firms, spanning aviation, consumer goods, and apparel, are emblematic of the broader struggle to mitigate tariff-driven costs while maintaining growth. Their results will serve as critical signals for sector rotations, Federal Reserve policy expectations, and the durability of corporate balance sheets.

Delta Air Lines: Rerouting Risk, Reaping Rewards

Delta's earnings (EPS estimate: $2.02) will hinge on its ingenuity in sidestepping tariffs. The airline's strategic rerouting of Airbus deliveries—diverting planes to Tokyo before introducing them into U.S. service—has averted $100+ million in potential tariffs. This tactic, which classifies aircraft as “used” imports, exemplifies corporate creativity in a protectionist climate.

Despite strong Q1 results (2% revenue growth, $240M net profit), Delta faces headwinds: weak corporate travel demand and rising fuel costs. Its operational flexibility—prioritizing high-margin routes and cutting capacity in lagging markets—will be key. A beat could validate its defensive stance, while a miss might amplify recession fears. Investors should watch for margin sustainability and Atlantic region recovery.

Conagra Brands: Navigating Inflation with a Pinch of Salt

Conagra's Q2 results (EPS guidance: $0.48–$0.53) reflect the harsh reality of tariff-driven cost inflation. The company's reliance on steel for canned goods and commodities like soybeans has left it exposed to U.S. tariffs on Chinese imports. While 75% of domestic tin plate steel production has vanished, Conagra is sourcing globally—a costly but necessary move.

The company's “surgical” price hikes on select products and focus on pantry staples (microwave popcorn, frozen meals) have stabilized demand amid rising grocery prices. However, its Zacks Rank of #5 (Strong Sell) and 5.2% Q3 organic sales decline underscore execution risks. Investors should weigh its 3.7% dividend yield and free cash flow resilience against lingering margin pressures. A positive surprise could signal broader consumer resilience, while a miss may intensify calls for Fed easing.

Levi Strauss: Global Diversification as a Shield

Levi's earnings (EPS estimate: $0.13) will test its supply chain agility in the face of tariffs. With sourcing spread across 30 countries (no single nation >30% exposure), the company has minimized direct tariff impacts. Less than 1% of U.S. sales come from China, while Mexico and Vietnam account for mid-single-digit shares.

Strong DTC sales (9% growth) and brand equity in premium denim have buoyed results. Yet, currency headwinds and potential retaliatory tariffs loom. Levi's $1.2B liquidity and focus on e-commerce (16% organic growth) position it well for recovery, but investors must monitor macro risks like a U.S. recession. A beat could reignite investor interest in consumer discretionary stocks.

Broader Market Implications

These earnings will illuminate two critical themes:
1. Corporate Resilience: Can firms offset tariff costs without sacrificing margins or growth? Delta's rerouting and Conagra's pricing experiments offer contrasting models.
2. Fed Policy Crossroads: Positive results could signal cooling inflation (easing rate hike concerns), while misses might force the Fed to stay hawkish.

Investors should also note sector bifurcation:
- Delta's leisure travel strength vs. Conagra's pantry staple demand reflects households prioritizing experiences over discretionary goods.
- Levi's global diversification highlights the premium placed on supply chain flexibility.

Actionable Insights for Investors

• Delta: Buy dips if earnings beat expectations, but avoid if margins disappoint. Monitor business travel metrics.
• Conagra: Wait for input cost easing before entering. The dividend yield offers downside protection.
• Levi: Accumulate on weakness ahead of earnings. Its brand resilience and EBIT margin expansion (70–90 bps) justify a long-term view.

The July 10 reports are a litmus test for corporate adaptability in an era of trade wars and weak demand. Companies that balance cost discipline with strategic innovation—like Delta's rerouting or Levi's global sourcing—will emerge stronger. Investors should favor those with defensive balance sheets and diversified revenue streams, while remaining vigilant to macro risks. The path ahead is bumpy, but these earnings could redefine the landscape for months to come.