Tariff fallout and refunds set to shape Home Depot, TJX, Lowe’s earnings

Earnings Watch: Tariff Costs and Potential Refunds to Drive Retailer Results

Last Updated: Feb. 22, 2026 at 8:57 p.m. ET

The Supreme Court struck down most of the Trump administration’s emergency-use tariffs, creating a new earnings variable for major U.S. retailers this reporting week. The ruling injects near-term uncertainty into cost-of-goods, duty expense recognition and the possibility of retrospective refunds, all issues that management teams will need to address on quarterly calls.

Who reports this week

- Home Depot (HD) reports results on Tuesday.

- Lowe’s (LOW) follows a day later.

- TJX (TJX), operator of TJ Maxx and Marshalls, reports Wednesday.

- Urban Outfitters (URBN) and Steve Madden (SHOO) round out the week’s retail calendar.

Each of these chains faces different exposure to import tariffs and will likely frame the Supreme Court decision in the context of margins, inventory and guidance.

Why the ruling matters for investors

The Supreme Court decision alters the regulatory backdrop for tariff-related duties that retailers have been absorbing or passing through. Key implications for public-company earnings include:

- Tariff expense volatility: Reversal of tariffs can reduce cost-of-goods-sold (COGS) in future periods if duties are no longer applied at the border.

- One-time adjustments or refunds: The ruling increases the potential for retroactive duty refunds or accounting adjustments that managements may disclose as discrete items in the quarter.

- Guidance sensitivity: Management may revise near-term guidance to reflect lower input costs or, conversely, to account for one-time remediation costs associated with reclassifying past expenses.

- Competitive margin impact: Discounters such as TJX (TJX) may experience different pass-through dynamics than home improvement leaders Home Depot (HD) and Lowe’s (LOW) due to differences in supplier contracts, inventory mix and pricing elasticity.

These are material factors that professional traders and analysts should watch closely during earnings releases and conference calls.

What to watch on each company’s report

Analysts and traders should prioritize the following items when parsing filings, press releases and earnings calls:

Tariff-related line items in COGS and SG&A: Identify any discrete tariff expense or rebate entries and note presentation (operating vs. non-operating).

Disclosure of refunds or receivables: Look for explicit discussion of potential or realized duty refunds, and whether companies recognize receivables on the balance sheet.

Guidance updates: Note any changes to full-year or near-term margin and sales guidance tied to tariff adjustments.

Comparable-store sales (comps) and traffic drivers: Understand whether tariff changes are being used to support pricing strategies or margin restoration.

Inventory valuation and turnover: Assess whether lower input costs could prompt markdowns, revaluation, or changes in inventory policy.

Capital allocation commentary: Listen for any shift in share buybacks, dividends or capex plans if tariff costs materially change cash flow expectations.

Sector-specific considerations

- Home improvement retailers (Home Depot HD, Lowe’s LOW): These retailers source a mix of durable goods and building materials. Even modest duty reversals can influence gross margin on large-ticket items and impact vendor pass-through arrangements.

- Off-price and apparel retailers (TJX TJX, Urban Outfitters URBN, Steve Madden SHOO): Apparel and accessory supply chains are typically more import-dependent and can see immediate margin relief from lower duties. Off-price operators may prioritize price competitiveness, while branded apparel chains may use savings to rebuild gross margin.

How traders should position ahead of earnings

- Monitor pre-market filings and 8-Ks for preliminary disclosures on tariff refunds or adjustments.

- Pay attention to management language during prepared remarks and Q&A; clear statements on expected refund timing or magnitude are trading catalysts.

- Use volatility-aware option strategies if uncertainty around tariff-related adjustments increases implied volatility ahead of calls.

- Compare tariff exposure across peers: a company-specific disclosure of a receivable or one-time gain has different implications if peers are silent.

What will make headlines

- Any company that reports a material one-time tariff refund or records a receivable tied to the Supreme Court decision will likely move materially in intraday trading.

- Clear guidance revisions attributing improved margins to lower tariffs will be treated as durable positives by market participants.

- Lack of clarity or vague disclosures may prolong uncertainty and keep shares range-bound until follow-up filings clarify the financial impact.

Analyst checklist for the quarter

- Confirm whether tariff impacts are recorded in the quarter and whether they are recurring or one-time.

- Quantify the impact on gross margin percentage and EPS where companies provide numeric estimates.

- Revisit valuation models to incorporate any confirmed refunds, recurring cost reductions or revised guidance.

Bottom line

The Supreme Court’s decision to strike down most of the emergency-use tariffs has introduced a new, measurable variable into this week’s retail earnings. Home Depot (HD), Lowe’s (LOW), TJX (TJX), Urban Outfitters (URBN) and Steve Madden (SHOO) will likely address tariff costs, potential refunds and the implications for margins and guidance. For professional traders and institutional investors, the most actionable disclosures will be explicit dollar amounts, receivable recognition and forward-looking guidance tied to tariff changes.

Prepare to parse earnings releases and management commentary for discrete tariff-related entries; those disclosures will determine near-term price action across the retail sector.