Customer with buying cart within the snack aisle of a Walmart retailer in Florida City, Florida, Aug. 5, 2025.
JC Milhet | AFP | Getty Images
As among the largest names in retail, together with Walmart and Home Depot, delivered earnings leads to latest weeks, they up to date Wall Street on how they and their consumers are responding to President Donald Trump‘s wave of tariff will increase.
The takeaway?
Tariff prices are rising for retailers, and so they’ve needed to get inventive to keep away from widespread worth hikes.
Yet shopper spending has largely stayed robust to this point — and the pinch from greater duties hasn’t been as extreme as some corporations had feared. Compared with their considerations within the spring, retail executives struck a measured tone and mentioned they do not anticipate their prices, or prospects’ costs, to leap dramatically.
Walmart had given one of the strongest warnings in May, as CFO John David Rainey mentioned he anticipated some costs to rise in the course of the summer time. In an interview with CNBC on Thursday, nonetheless, Rainey mentioned the nation’s largest retailer has raised prices on some objects, however in different elements of its shops has stored costs down or expanded reductions.
“There are certainly areas where we have fully absorbed the impact of higher tariff costs,” he mentioned. “There are other areas where we’ve had to pass some of those costs along. But when you look across the basket of items, we’re certainly trying to keep prices as low as we can.”
Scot Ciccarelli, a retail analyst for Truist, mentioned retailers are elevating costs “but not nearly to the degree that might have been expected in early April” when Trump first introduced his steep tariffs on dozens of nations.
“Most of the companies are kind of downplaying the impact of tariffs,” he mentioned. “They’ve all talked about substantial mitigation efforts, whether that is diversifying sourcing, whether that is pushing price back to vendors.”
Here are three takeaways from a busy couple of weeks of retail earnings.
Consumer spending is regular — with some exceptions
The drumbeat of regular, however selective, U.S. shopper spending continued this quarter.
At Walmart, the nation’s largest grocer by income, gross sales of private-label objects, which are likely to price lower than nationwide identify manufacturers, had been roughly flat, Rainey instructed CNBC. When prospects commerce right down to these cheaper manufacturers or smaller packs of things, it might probably sign U.S. households really feel strapped for money.
As corporations carefully watch the buyer, Rainey mentioned Walmart has seen shopper conduct that is “very consistent.”
“They continue to be very resilient,” he mentioned.
Walmart and Coach mother or father firm Tapestry each raised their gross sales outlooks for the complete 12 months. Both corporations mentioned they noticed wholesome gross sales of discretionary objects, corresponding to clothes and purses.
Sales of style objects, together with girls’ attire and sneakers, accelerated at Walmart within the quarter, Rainey mentioned.
One of Coach’s purses, the massive Kisslock bag that prices $695, offered out inside minutes of launching in July, Tapestry CEO Joanne Crevoiserat mentioned final week on the corporate’s earnings name.
Yet some classes are nonetheless a tricky promote. And lower-income consumers have been extra delicate to cost modifications.
Walmart CEO Doug McMillon mentioned Thursday that the impact of tariffs on spending “has been somewhat muted.” Still, he added some consumers have seen and responded when costs creep up.
“As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters,” he mentioned. “Not surprisingly, we see more adjustments in middle- and lower-income households than we do with higher-income households and discretionary categories where item prices have gone up.”
Sales at Home Depot and Lowe’s improved because the quarter went on, with the strongest in July. Still, the businesses weren’t able to predict a turnaround for dwelling enchancment.
Lowe’s CEO Marvin Ellison attributed among the latest pickup in demand to raised climate and mentioned “it’s too early for us to call that a trend.” Higher mortgage charges and borrowing prices have dinged householders’ willingness to deal with a significant renovation or transfer to a brand new dwelling, which tends to spur dwelling tasks.
Other manufacturers had extra dire warnings about spending. On the corporate’s earnings name, Crocs CEO Andrew Rees described the backdrop for the second half of the 12 months as “concerning” and mentioned its retail orders are weak.
He described Crocs’ prospects as “super cautious.”
“They’re not purchasing. They’re not even going to the stores, and we see traffic down,” he mentioned, including that is additionally true at its retailers, which draw extra lower-income households.
Customers store at a Home Depot retailer on August 19, 2025 in Chicago, Illinois.
Scott Olson | Getty Images
Retailers have blunted the consequences of tariffs … to this point
Retailers have jumped into motion to attempt to reduce price will increase from tariffs or keep away from them altogether.
Those techniques have included importing items from a wider vary of nations, getting objects to the U.S. early and stocking up on high-frequency purchases or contemporary merchandise that customers usually tend to purchase, even at greater costs, in response to interviews of retail executives and earnings calls.
Yet as Walmart confirmed, retailers have been strategic about worth will increase — to not solely keep away from spooking prospects, but additionally to dodge potential scrutiny from the White House. Trump criticized Walmart in May after the corporate warned it must increase costs.
Sharkninja, which makes a variety of things together with blenders and hairstyling instruments, has “increased sell price on products, but done it very, very carefully,” CEO Mark Barrocas mentioned in an interview. And in some circumstances, it needed to roll again a part of these worth will increase, he mentioned.
The firm has additionally lowered discounting and raised the worth of recent merchandise when it debuts. For instance, Sharkninja initially deliberate to launch a brand new infrared skincare masks known as CryoGlow at $299, however as a substitute determined to cost it at $349, he mentioned.
For Walmart, Target and Tapestry-owned Coach, importing goods early and having merchandise in warehouses earlier than tariffs took impact have helped them curb the hit from greater charges.
Home Depot Chief Financial Officer Richard McPhail instructed CNBC many of the imported merchandise the corporate offered in the course of the quarter landed forward of tariffs. And Home Depot is taking extra steps to blunt the consequences: More than half of what the corporate sells comes from the U.S. and it goals to import not more than 10% from any single nation by the tip of the 12 months.
Yet the tariff invoice continues to be including up. Walmart’s McMillon mentioned he expects greater prices from duties to proceed by the second half of the fiscal 12 months. Other corporations additionally offered particular estimates of how a lot the upper duties will price them.
Even as Tapestry posted gross sales progress, its shares tumbled final week after it mentioned prices from greater duties would complete $160 million this upcoming fiscal 12 months and ding income.
While Trump’s tariff coverage seems extra settled than within the spring, tariffs on some nations might nonetheless rise.
Many of Trump’s tariffs on nations began in early August, however one of many key charges nonetheless hangs within the steadiness. He delayed higher tariffs on China for 90 days final week. Those had jumped as high as 145%, however are actually at 30% as negotiations proceed.
Target acknowledged the commerce uncertainty with its personal technique. It gave a wider than regular vary for its full-year earnings per share outlook.
Inside a Crocs retailer at Queens Center in New York.
Ryan Baker | CNBC
Strong manufacturers, new moneymakers matter greater than ever
Strong model loyalty and profitable new companies have made it simpler for some corporations to climate the uncertainty.
As householders postpone bigger tasks, Home Depot and Lowe’s have bulked up their enterprise amongst dwelling professionals to draw steadier visitors and put together for when demand picks up once more. Along with reporting earnings this week, Lowe’s introduced it is shopping for Foundation Building Materials for $8.8 billion, marking its second acquisition of a house professional-focused firm in latest months.
Home Depot introduced its own pro-focused deal earlier this summer time and made the largest acquisition in its historical past when it bought SRS Distribution final 12 months.
Walmart additionally has benefited from newer income streams, particularly its promoting enterprise and third-party market. Global promoting grew 46% in the most recent quarter, together with ad-enabled sensible TV maker Vizio, which it acquired last year.
Its market income grew by 17% 12 months over 12 months. That enterprise consists of sellers who get charged a fee and sometimes pay for companies, corresponding to advertisements on Walmart’s web site to advertise their merchandise or achievement companies to have the big-box retailer retailer pack and ship orders to prospects.
Those “more diversified set of profit streams,” which have greater margins than promoting a gallon of milk or a T-shirt, make Walmart’s earnings steadier at the same time as the corporate faces revenue pressures, Rainey mentioned on the corporate’s earnings name.
“We are more than just a standard brick-and-mortar retail business,” he mentioned on the decision.
For some manufacturers, buyer demand is excessive sufficient to assist offset tariffs or enable them to cost extra.
Sandal maker Birkenstock, as an example, “saw no pushback or cancellations” after its tariff-related July 1 worth will increase, CEO Oliver Reichert mentioned on the corporate’s earnings name.
Coach, which has pushed up its common worth of things over the previous 5 years and lowered its stage of markdowns, can higher “absorb a lot of these input costs,” Coach CEO Todd Kahn instructed CNBC.
On the flip facet, tariff prices have hit some manufacturers more durable, particularly if they do not have the brand new merchandise prospects appear to need or are skittish about what gross sales will appear like later this 12 months. High-performing corporations with huge scale corresponding to Walmart usually have leverage with distributors to cross on prices — however different companies won’t.
“If you’re a struggling brand, or you’re not really growing your business with a vendor, that vendor has less incentive to absorb incremental costs, whether it’s from tariffs or supply chain or whatever,” Truist’s Ciccarelli mentioned.
Target mentioned its revenue margins within the quarter had been harm by the prices of cancelling orders. Crocs additionally mentioned it’s reducing orders for the back half of the year.
Crocs took one other uncommon step: Rees mentioned the corporate is taking again older stock from retailers that promote its Heydude shoe model and swapping it out with brisker kinds.