Goodbye tariffs, we hardly knew you. The same can be said about tariff refunds.
Total tariffs collected under the International Emergency Economic Powers Act (IEEPA) easily topped $160 billion through January 2026, before the Supreme Court ruled them illegal in February. Although it appears that some companies have already started receiving refunds, knowing exactly how this will impact retailers is tricky, given the lack of information around the process, notes Bernstein analyst Zhihan Ma. Therefore, refunds are unlikely to be a spark for consumer stocks that have lagged the broader market this year.
She notes that the first wave of refunds has already gone out, judging by the Treasury Department's Customs and Border Protection withdrawals, with more to come, given that the CBP typically processes refunds within 60 to 90 days of a successfully filed and accepted claim.
She estimates that for retailers in general, refunds will amount to approximately 35 to 75 basis points of their U.S. sales range, assuming a 40% refund success rate on claims for the six months that tariffs were paid. That's equivalent to some $5.7 billion for the major retailers she covers.
However, those figures can only be rough estimates, given that nearly all retailers have declined to quantify their tariff refund impact.
Walmart is the only company in Ma's coverage that has provided hard numbers, saying it expects to receive more than $3 billion in refunds, or about 50 basis points of its U.S. net sales. Dollar Tree said it received $110 million in tariff refunds as of its first quarter, but didn't give any indication of how much more it expects.
The waters are further muddied by the fact that retailers don't keep all the money themselves: "As a caveat, these estimated refunds amounts are not what retailers will actually benefit from, as a portion of what retailers receive will be shared with suppliers," she writes. "By the same token, for products where suppliers are importers of record, they receive tariff refunds directly and will likely share some benefit with retailers."
Therefore, beyond the actual numbers, the more salient information for investors is how much of the refunds will flow to their bottom lines. That's again an open question given that no retailers have included refunds in their guidance, with many remaining conservative in their outlooks (perhaps to also incorporate concerns about the health of the consumer amid higher gas prices).
"Our expectation is that price leadership like Walmart and Costco will look to pass on value to their customers / members to drive share gains, " writes Ma. "This could force the hand of others...We would expect Target and Dollar General to try to maintain proportional price gaps. On the other hand, Dollar Tree is unlikely to lower its fixed price points ahead of potential new tariffs in July."
Ultimately, while at least some of the tariff refunds could pad retailers' bottom lines, or at the very least offer a cushion to offset transportation and packaging inflation, it's not likely to move the needle much for long-term investors.
That's unfortunate for retailers, given that they could benefit from a positive catalyst. Between the ongoing fervor for artificial intelligence plays and worries about how consumers are coping with inflation, there's been little investor interest in consumer stocks. The State Street SPDR S&P Retail exchange-traded fund is up just 3% in 2026 and the State Street Consumer Discretionary Select Sector SPDR ETF is in the red year to date, even as the S&P 500 is up 7.5% through Wednesday's close.
It looks like it will take more than tariff refunds to change that pattern.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 25, 2026 14:02 ET (18:02 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments