Refunds tied to invalidated Trump administration tariffs are shifting quarterly financial results across public companies, with reported impacts ranging from higher margins to lower prices for consumers.
U.S. Customs and Border Protection said earlier this month that it paid out $100 billion in tariff refunds as of July 31 in the wake of the Supreme Court’s February decision striking down President Donald Trump’s use of the 1977 International Emergency Economic Powers Act to impose open-ended import levies.
For CFOs, the refunds are creating new financial and accounting questions to answer for investors on earnings calls.
“Tariff refunds have created meaningful impacts for businesses,” Lynlee Brown, a partner in Ernst & Young's global trade practice, said in an email. “There are numerous examples of companies leading their earnings calls with the impact of these refunds.”
Meanwhile, beyond Wall Street, the refunds are drawing scrutiny from consumers and lawmakers.
Roughly 100 putative consumer class actions are now pending against businesses over the IEEPA tariffs, according to a recent analysis by law firm Holland & Knight. The cases span nearly 30 federal districts, with new complaints continuing to be filed. The litigation has expanded beyond retail and shipping to include grocery and consumer packaged goods, energy, cycling and home goods companies.
Sens. Elizabeth Warren, D-Mass., and Rand Paul, R-Ky., are among members of Congress who have pressed for tariff refunds to beneift consumers who paid higher prices.
Here are six public companies that have disclosed significant tariff refunds in their recent quarterly results.
Walmart
Walmart received nearly $2.9 billion in tariff refunds during its fiscal second quarter, the retail giant said Aug. 20. The company prioritized investment in price during the quarter and delivered more than 11,000 price rollbacks, according to an earnings release.
“We've taken a disciplined approach to investing these funds back into customer experience and price leadership, prioritizing investment in grocery and general merchandise categories,” Walmart CFO John David Rainey said on an earnings call for the quarter.
Adjusted operating-income growth of about 17% in constant currency included a 750-basis-point benefit from the refunds, according to the release.
Target
Target received $994 million in pretax tariff-refund benefits in the second quarter, with the amount classified as a reduction of cost of sales, the company said in an Aug. 19 earnings release.
The refund contributed $752 million to net earnings and 3.7 percentage points to Target's gross-margin rate and operating-income margin rate for the quarter.
The impact also extended to Target's full-year outlook. The company raised its earnings-per-share guidance to $9.90 to $10.90 from $7.50 to $8.50, a range that includes the $1.65-per-share benefit from tariff refunds recognized in the second quarter, CFO Jim Lee said during an earnings call.
Target's guidance excludes any potential additional refunds for the remainder of the year, he said.
Apple
Apple reported in July that its fiscal third-quarter gross margin was 50.1%, including a favorable impact of about 2 percentage points from tariff refunds. That translates to an estimated $2.2 billion in tariff refunds, according to NPR.
Without the tariff-refund benefit, Apple's gross margin would have been at the midpoint of the company's previous guidance, CFO Kevan Parekh said on an earnings call. The tariff refunds had a favorable impact of more than 2.5 percentage points on products gross margin, he said.
Parekh said the company's gross-margin guidance for the fourth quarter is 47% to 48%, including an expected benefit of about 1 percentage point from tariff refunds.
CEO Tim Cook said earlier in the year that tariff refunds would be directed toward “U.S. innovation and advanced manufacturing,” as additional investment on top of Apple's existing U.S. commitments.
Home Depot
Home Depot received $730 million in tariff refunds during its fiscal second quarter, CFO Richard McPhail said on the company's Aug. 18 earnings call. The amount represented the vast majority of what Home Depot expects to receive from its IEEPA claims.
“While these refunds were received in the second quarter, they are being used to offset unplanned and rising cost pressures throughout the year,” he said.
The company’s gross margin in the second quarter was 33.7%, an increase of about 25 basis points compared with a year earlier. That was primarily driven by the refund, offset by factors such as fuel and energy cost pressures, according to McPhail.
Of the $730 million received, $685 million reduced cost of goods sold, while $45 million was associated with inventory, he said.
Amazon
Amazon received about $600 million in tariff refunds during its second quarter, CFO Brian Olsavsky said on the company's July earnings call. Olsavsky said the amount represented the vast majority of refunds the company expects to receive.
Amazon plans to refund customers when it can identify tariff costs that were passed on to them. For the remainder, Olsavsky said Amazon will use the refunds to continue to invest in low prices for customers.
PepsiCo
PepsiCo expects tariff refunds it has claimed to contribute about 1 percentage point to full-year EPS growth, CFO Steve Schmitt said during a July earnings call. The company reported $24.2 billion in second-quarter revenue and $2.20 in core EPS.
Schmitt said the refunds would help offset commodity cost pressures and allow the company to continue to play offense as it manages higher costs.
CEO Ramon Laguarta said on the same call that the tariff recovery was “obviously very handy” to the company.
