Tariff Refunds Fuel Profit Surges for U.S. Retail Giants Target and Walmart

Target Corp. disclosed a $994 million pre-tax tariff reimbursement that lifted second-quarter operating income to $2.6 billion, roughly double the prior year, and added $752 million to net earnings, raising adjusted EPS to $2.46. Walmart Inc. reported tariff refunds of about $2.9 billion, contributing to a $6.4 billion net-income figure for the quarter ending July 31. Both retailers said the one-time windfall helped them meet internal earnings guidance.

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In February 2026, the U.S. Supreme Court ruled that President Donald Trump’s broad import-tariff regime violated trade law, triggering a refund program administered by U.S. Customs and Border Protection that has already returned roughly $100 billion to importers. The administration continues to levy duties through alternative mechanisms, leaving many companies still subject to additional taxes.

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• Target: $994 million refund; operating income $2.6 billion; net-earnings boost $752 million; full-year EPS guidance $9.90-$10.90 (including refunds).

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• Walmart: $2.9 billion refunds; net income $6.4 billion; revenue $187.9 billion; adjusted EPS 81 cents; gross margin up 96 basis points to 25.4 percent.

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• Other retailers: TJX $331 million; Home Depot $730 million; Lowe’s $80 million; Nike, Amazon, FedEx and Apple also reported sizable refunds.

CNN

Target CFO Jim Lee said the company will “continue to invest in price” but gave no specifics. CEO Michael Fiddelke called the refund a “one-time boost” and emphasized disciplined execution.

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Walmart CFO John David Rainey said the refunds will be channeled into “price investments” and broader “customer-experience” initiatives. Both firms noted the refunds enable price rollbacks—Target cut prices on more than 10,000 items, Walmart over 11,000.

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• “We're encouraged by the progress made so far, and we're also clear-eyed about the important work still ahead,” — CEO Michael Fiddelke

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• “Customers tell us they’re still feeling some pressure,” — Walmart CEO John Furner

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Walmart’s disclosures differ slightly on the exact refund figure, creating a minor reporting discrepancy.

Walmart: Operating Income Jumps 28.8% As eCommerce Sales Rise 23% And Digital Businesses Outpace $187.9 Billion Retail Base

U.S. Customs and Border Protection continues processing refunds from the $168 billion pool collected from importers. Target and Walmart indicated remaining refunds will support price reductions and “price leadership” in upcoming quarters. Analysts expect the impact to appear in Walmart’s third-quarter guidance, which projects sales growth of 3-3.75 percent and adjusted EPS of $0.62-$0.64.

CNN

The refund program and retailers’ commitment to pass savings to consumers will shape pricing dynamics and competitive positioning in the U.S. retail sector for the rest of the fiscal year.

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