Walmart, e.l.f. Beauty use tariff refunds to cut prices in 2026

Walmart, e.l.f. Beauty use tariff refunds to cut prices in 2026

Mon, August 31, 2026 at 3:25 PM GMT+3 3 min read

• WMT +0.45%
• ELF -1.95%

Major retailers and consumer goods companies are directing tariff refund payments toward price cuts as inflation-fatigued shoppers pull back on spending, according to The Wall Street Journal. The refunds trace back to a Supreme Court decision earlier this year holding that the International Emergency Economic Powers Act did not give President Donald Trump authority to impose those tariffs, an outcome that set off more than $160 billion in payments back to importers.

Walmart said it rolled back prices on 11,000 items, including ground beef, using roughly $2.9 billion in tariff refunds. Chief Financial Officer John David Rainey said on an earnings call that shoppers began making visible spending trade-offs in June as gas prices climbed above $4 a gallon. The company said the price impact for consumers would be felt in the current fiscal third quarter.

E.l.f. Beauty, which received about $50 million in refunded tariff payments, ran a series of pricing tests before permanently lowering prices across around 10% of its catalog, among them its Cream Glide Lip Liner. Fields explained that the initial test involved dropping the Halo Glow Skin Tint's price by $4, a move that drove unit sales up by close to 40%. Net sales for the quarter ended June 30 climbed 36% to $479.4 million, the company said.

Tractor Supply has channeled its refunds into shielding customers from freight and fuel cost increases, lowering prices on products including pine shavings and premium pet food rather than pushing those expenses onto shoppers, according to the Wall Street Journal. Chief Financial Officer Kurt Barton declined to disclose the refund amount the company received. Tractor Supply's gross margin edged up to 37.1% for the quarter ending June 27 from 36.9% in the same period last year, though the company anticipates that freight costs will weigh on margins during the back half of the year once refund benefits diminish.

Not every retailer is passing refunds to shoppers. Lowe's CEO Marvin Ellison told CNBC that the company received roughly $80 million in refunds and chose to direct them toward shareholder returns rather than price reductions. Kohl's CEO Michael Bender told CNBC the company put $100 million of its refunds into its gross margin and plans to invest the remainder in deeper inventory.

According to CNBC, AlixPartners managing director Bryan Eshelman, who leads the firm's retail practice, said the tariff refund situation is more complicated than simply deciding how to spend the money. Tariff expenses were typically absorbed into broader cost structures rather than assigned to specific products, making it nearly impossible to determine what share of any refund corresponds to the extra amount a given consumer paid. "How does a consumer know that the price went down commensurate with the level of rebate?" Eshelman said.

Burlington Stores said it plans to reinvest all $55 million of its tariff refunds into lower prices for shoppers over the second half of its fiscal year. Chief Executive Michael O'Sullivan said the company intends to use the refunds to improve the deals it already offers customers.