Retail Q2 Beats Largely Driven by Tariff Refunds, Not Consumer Strength

Earnings
โดย Zacks Investment Research·US·Read original
Summary · why it matters

Four major retailers reported Wednesday morning, all beating expectations and raising guidance, but a significant portion of those profits came from a Supreme Court decision rather than stronger consumer spending. The court struck down IEEPA tariffs on February 20th, triggering roughly $166 billion in collections from some 330,000 importers, with about $100 billion refunded as of July 31st. Walmart disclosed the largest refund, while Lowe's received $80 million, about one-ninth of Home Depot's amount. Abercrombie & Fitch reported record second-quarter net sales of $1.27 billion, up 5%, and earnings of $4.17 per diluted share, but the IEEPA refund contributed $1.75 per share, making underlying EPS about $2.42. Williams-Sonoma stood out with comparable brand revenue up 6.2%, accelerating from 4.8% last quarter, and raised its full-year outlook. Kohl's beat with EPS of $1.28 against roughly $0.55 expected, and Bath & Body Works beat despite a 2.3% sales decline. The macro data shows consumers feel better about today but worse about tomorrow, with core PCE rising 0.2% month over month. Investors should normalize for tariff refunds, watch how retailers deploy the windfall, and focus on companies that didn't need the help, like Williams-Sonoma and Sam's Club.

Impact on stocks 7

Consumer Discretionary▲ · 6 stocks
Abercrombie & Fitch Company
ANF
▲ PositiveCapitalrelevance

Record Q2 sales and EPS, but $1.75/share from tariff refund inflates earnings; underlying EPS lower.

Williams-Sonoma Inc
WSM
▲ PositiveDemandrelevance

Williams-Sonoma's comparable brand revenue up 6.2%, accelerating, and raised full-year outlook.

The Home Depot Inc
HD
▲ PositiveCapitalrelevance

Received largest tariff refund among retailers, boosting profits.

Lowe's Companies Inc
LOW
▲ PositiveCapitalrelevance

Received $80 million tariff refund, about one-ninth of Home Depot's amount.

Kohl's Corporation
KSS
▲ PositiveCapitalrelevance

Beat EPS expectations significantly, partly due to tariff refunds.

Consumer Staples▲ · 1 stocks
Walmart Inc.
WMT
▲ PositiveRegulationrelevance

Walmart disclosed the largest IEEPA tariff refund, boosting profits.

© 2026 MarketDXNews