By Mark Seavy

Retailers flush with tariff-related refunds have deepened their orders and are moving aggressively on price.

The trend was made clear last week as companies like Walmart, Target, TJX Companies, and Ross Stores released earnings that contrasted sharply with a year ago, a time when many retailers reduced or cancelled orders in the face of newly imposed tariffs on imported goods.

The change was driven by the U.S. Supreme Court’s decision earlier this year to strike down tariffs imposed by the Trump administration and clear the way for refunds for reciprocal duties paid under the International Emergency Economic Powers Act (IEEPA). But the tariff-related refunds varied from retailer to retailer.

In the case of Target and Walmart, it amounted to $994 million and $2.9 billion, respectively, the bulk of which was recorded in Q2. On the supplier side, Nike recorded a $986-million refund as of mid-July. For companies like Columbia Sportswear ($78 million), Amer Sports ($50 million), and Weyco Group ($18.6 million), the refunds were smaller.

How retailers have adjusted their strategies over the past year in response to those tariffs also varied.  Some companies absorbed a portion of the levies, while others imposed price increases.

Target has been offering 30% discounts on select products from its Heyday private label assortment (kitchen products). It also lowered prices on 10,000 items during the past year. Sales of plush toys at Target, for example, increased 20% during Q2 with customers “gravitating” toward those priced in the $5-$20 range, said Cara Sylvester, Chief Merchandising Officer at Target. And 95% of Target’s back-to-school suppliers this year were priced less than in 2025, she said. Target showed strength in toys, fashion, and groceries as well as private label brands like Scoop and Free Assembly. The chain’s back-to-college merchandise mix “outperformed” in throws, rugs, candles, and lamps in posting double- and triple-digital same-store sale gains.

“Our commitment to providing value for our guest has not changed,” Target CEO Michael Fiddelke said. “We continue to look first to find other means to reduce tariffs. Including changes to country of origin, collaborating with vendors to find offsets, and adjusting our assortment. Those tactics have helped us to reduce tariff pressure while continuing to deliver the combination of style, design, and value consumers expect.”

Walmart, meanwhile, reported sales of groceries, toys, fashion, and private brands were strong in the most recent quarter and the chain said it is gaining market share broadly, but especially among higher-income households, a term the retailer uses to describe households that earn $100,000 a year or more. Lower-income shoppers continue to spend cautiously, but they are spending, according to Walmart CFO John Rainey.

Walmart is “muting what was otherwise a higher price increase where consumers were feeling pressure” Rainey said. The retailer has focused refund money on products where prices have remained high, such as beef (the ground version of which hit $6.12 per pound in June, up 12% from a year earlier). Walmart posted a 33% gross margin in Q2, 3.7% of which was tied to the refund. Without the refund, the retailer’s gross margin was 30%, up 1% from a year earlier.

At the same time, Walmart boosted its forecast for an increase in annual sales to 4-5% (up from 3.5-4.5%), Rainey said. Walmart has priced 14 key items, including school supplies, less than were in 2019, according to Walmart U.S. President David Guggina.

“We’re investing heavily in price because customers need us to and because we believe it drives market share gains over time,” Walmart President and CEO John Furner said. “Our price gaps to conventional grocers here in the U.S. are strong, and they continue to widen. The share gains we see from this channel have persisted alongside the drug and dollar. Our outlook reflects the continued prioritization of investing the remaining tariff refunds in the customer experience and price in the second half.”

Off-price retailers like TJX Companies (TJ Maxx, Marshalls, HomeGoods, Sierra Trading Post) and Ross Stores also appeared poised for price competition.

TJX reported a 4% gain in same store sales, but just a 1% increase in its namesake TJ Maxx chain amid apparel “missteps,” CEO Ernie Herrman said. While Herrman did not share details, the chain did not have the “right merchandise mix” in apparel at TJ Maxx and Marhsalls stores, Herrman said. As a result, any potential for price increases given the current market is “moderate,” he said.

Nevertheless, TJX increased long-term growth plans to 7,500 locations, including 2,200 under its existing retail banners in 10 countries. TJ Maxx (currently 1,353 stores) and Marshalls (1,265 stores) will increase to 3,300 and the HomeGoods Division (which includes HomeSense locations) will increase to 2,000.

Ross Stores also believes that increasing prices would be “foolhardy” in current economics, CEO James Conroy said. Ross, which posted a 13% gain in sales ($6.3 billion) on a 10% rise in same-stores sales in Q2, is forecasting revenue to jump 5-6% for the year, according to CFO William Sheehan.

In receiving tariff refunds, the “important thing for retailers is what they will do to reinvest those refunds back into lower prices in consumable items so that the maximum number of consumers can benefit,” Corey Tarlowe, SVP of Equity Research at the financial firm Jefferies, told CNBC. “The data shows it is working.”

Additionally, the chains are buying a deeper inventory mix than they did a year ago when tariffs impacted merchandise strategies, licensing executives said.

Target, for example, is maintaining a $15 entry-level price for Halloween costumes, the same as a year ago. But the retailer is also taking in more “deluxe” costumes and décor items, a licensing executive at a costume company said.

“Halloween décor is going to big again this year,” the licensing executive said. “Last year it was the first thing many retailers cut because it carries a higher price.”