Tariffs finally crept into retail's latest earnings results. Who were the winners and losers?
The long-awaited levies took a toll on nearly every retailer, but execution separated who could steer through the costs.
As the latest round of retail earnings wrapped up, tariffs finally made it to checkout. From Walmart to Lululemon, execs grumbled that new duties were putting pressure on profits.
Still, guidance told the story: most retailers managed to nudge their outlooks higher, with Walmart, Dollar General, Macy’s, TJX, and Ulta Beauty all raising the bar. One major exception was Lululemon, which delivered one of the steepest guidance cuts of the season, sending shares down over 22% and cementing its spot as the worst-performing S&P 500 stock this year. Tariffs may be a headwind for the entire industry, but execution separated who could still steer through the costs.
Winners & losers
Off-price players continued to shine as they leaned on what they do best: offering discounted home and apparel goods while sidestepping much of the tariff burden. TJX highlighted stronger transactions across every division, and that momentum helped push shares to all-time highs.
Walmart missed quarterly earnings expectations for the first time in three years, but raised its full-year earnings and sales outlooks as the mega-retailer leveraged its scale to keep prices low for customers. Meanwhile, Ulta only mentioned tariffs once on its call and soared on the strength of beauty, where fragrance and skincare continue to drive double-digit growth. Even Gap managed to spin tariff chatter into a positive backdrop and recently announced a new expansion in beauty as the category remains resilient among shoppers.
VF Corp. admitted tariffs could slice $40 million off profits, overshadowing its Vans recovery story. Abercrombie & Fitch lifted guidance, but the mall retailer also hiked its tariff-hit estimate to $90 million, tempering an otherwise strong print. Meanwhile, Victoria’s Secret raised its outlook even as tariff costs swelled to $100 million. American Eagle soared after the teen apparel retailer posted blowout Q2 results and reinstated its full-year guidance as star-studded campaigns helped offset tariff pressures.
Zooming out
The SPDR S&P Retail ETF has rebounded off its spring lows and, over the past year, has actually outpaced the broader market. Goldman analysts say the consumer has held up well, with back-to-school strength and a taste for “newness” helping keep sales moving.
But most of the tariff hit hasn’t really landed yet, and the bigger squeeze is expected later this year and into 2026.
