The Tariff Tally: What are retailers doing with the money?
New York – The bigger the boxes, the bigger the bucks. Major retailers recently reported receiving most, if not all, of the tariff refunds they applied for.
The receipts flowing into publicly traded retailer accounts were announced as part of their Q2 financial filings. Here’s how they’re applying those payouts.
Bed Bath & Beyond Inc.
The company, which changed its corporate identity to Neighborhood Intelligence on Aug 17, received $9.5 million. It used most of the money to reduce the cost of goods sold and support a 310 basis point year-over-year gross margin improvement.
BJ’s Wholesale Club
BJ’s received roughly $20 million, which provided a 50-basis-point lift to its merchandise margin. The company said it used the funds to reduce product costs.
Burlington Stores
The off-pricer received $55 million in tariff refunds. Rather than taking a one-time boost to earnings, Burlington plans to fully invest the refunds into reducing prices during the back half of the year.
Costco
Costco is estimated to be due roughly $2 billion in tariff refunds and by early August had taken in about one-third of that total, according to a report from CFO Dive. The company has said it is investing the money into lowering prices. However, Costco is also embroiled in a proposed class-action lawsuit from an Illinois customer who wants a direct cash payback.
Dillard’s
Dillard’s received a $37.2 million refund, which helped push net income up 34% to $97.7 million.
Kohl’s
Kohl’s received approximately $150 million. Roughly $100 million of that went directly into beefing up gross margin/cost of merchandise sold. The remainder was recorded as a reduction of inventory and shared with vendors or invested to lower prices for customers.
Macy’s Inc.
Macy’s Inc. collected a total of $116 million, most of it during Q2. The company plans to put $20 million into goosing its full-year earnings per share. The remaining $96 million is being invested during the second half of the year into delivering for the customer – presumably with sharper prices – furthering the Macy’s nameplate’s Bold New Chapter strategy and supporting long-term growth.
Ollie’s Bargain Outlets
The close-out retailer has received $28.3 million, which it plans to reinvest in lowering prices to strengthen its competitive position.
RH
RH received $55.1 million in the second quarter and expects an additional $13.9 million in the second half of the year. Most of the money will be used to offset $50 million in unplanned supply chain cost increases due to the spike in oil prices resulting from the U.S. conflict in the Middle East. Roughly $19 million will be used to elevate earnings.
Ross Stores Inc.
Ross received approximately $253 million, but it does not plan to use the funds to lower prices. During the company’s Q2 investor call, CEO Jim Conroy noted that Ross did not pass on full price increases to its customers when tariffs were hitting hardest. It will use the refund to maintain pricing stability and absorb past cost pressures.
Target
Target received $994 million – which represented the majority of the refunds it applied for. The cash will be used both to elevate earnings and lower some product costs.
TJX Cos.
TJX received $331 million and expects additional tariff refunds to arrive in the third quarter. The company plans to divide the money between employee bonuses, boosting pretax profit and supporting future store growth.
Walmart U.S.
The big kahuna received the biggest bucks – $2.9 billion. Walmart said it will invest the tariff refunds in price cuts and improving the customer experience.
Wayfair
Because Wayfair doesn’t directly import goods, it did not quality to file for or collect tariff refunds.
Williams-Sonoma Inc.
The parent company of Williams-Sonoma, the Pottery Barn brands and West Elm received roughly $200 million in tariff refunds. Some of the money will be used to reimburse vendors and fund employee retirement accounts, while a portion will be retained as cash.
