Target Corporation announced its second-quarter 2026 earnings today, and along with its financials, the company revealed that it was a major recipient of federal tariff refunds for the quarter—to the tune of almost a billion dollars.
Here’s what you need to know about the tariff refunds, and whether Target customers can expect to see any reimbursement.
Target receives nearly $1 billion in tariff refunds
Today, Target reported its Q2 2026 results. The company is currently in the middle of a turnaround effort led by its new CEO, Michael Fiddelke, who took the helm in February. While the turnaround effort is in its early stages, it appears to be paying off so far.
For the quarter, Target said net sales grew 5.3% year-over-year, and comparable sales grew 3.8%, helped by a 3.6% growth in traffic.
In total, the retail giant brought in $26.54 billion in revenue, which was slightly above the $26.14 billion analysts were expecting, notes CNBC.
Announcing the results, Fiddelke said the company’s Q2 built “on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design, and value.”
But Target’s bottom line also got a boost from tariff refunds during the quarter.
The company says it received “$994 million of pretax tariff refund benefits within gross margin and operating income.” These tariff refunds contributed to the company’s quarterly net earnings to the tune of $752 million.
While tariff refunds were indeed a boon to Target, customers may now be asking whether they’ll see any direct reimbursements from Target or retailers that have received these refunds.
Will Target use the tariff refunds to reimburse customers?
When President Trump imposed his “Liberation Day” tariffs on goods from other countries in 2025, those countries and their manufacturers were not the ones who paid them.
Instead, the companies operating in America that imported the goods were stuck with the bill.
While some companies absorbed all or part of these tariff costs, most passed them on to their customers in the form of higher prices.
Then, earlier this year, the U.S. Supreme Court struck down Trump’s tariffs and ordered the government to refund the companies that paid them.
This ruling has left many customers wondering whether the companies receiving the refunds will reimburse them directly, since they ultimately paid for the tariffs through higher prices.
Though Target received a massive refund during its Q2, to the tune of nearly $1 billion, its report did not directly address the issue of reimbursing customers.
Fast Company has reached out to Target to ask whether it plans to reimburse customers directly for the higher tariff costs. We will update this post if we hear back.
However, based on Tuesday comments by Target chief financial officer Jim Lee, it doesn’t seem like Target plans to.
As noted by Modern Retail, when Lee was asked how he sees Target’s tariff refund windfall trickling down through the company’s business or to its customers, he indicated that the refunds will be reflected in future price adjustments.
“We have, and we will continue to, invest in price to ensure our guests are getting tremendous value each and every time they visit us at Target,” Lee said. “You saw that reflected in strong traffic growth this year, highlighting how guests are appreciating the value we’re offering. This includes reducing prices on . . . more than 10,000 items over the last year alone, and there’s more to come, even as we’re facing cost headwinds overall.”
In other words, based on Lee’s comments and the lack of any further details about customer-focused tariff refunds in today’s earnings report, it seems like Target will keep the tariff refunds itself, while using the extra operating income to help reduce prices on store shelves.
What have other companies said about tariff refunds?
Unsurprisingly, it appears that most companies receiving massive tariff refunds plan to keep the cash for themselves rather than issue refunds directly to customers.
As Fast Company previously reported, Apple alone received $2.2 billion in tariff refunds. Nike and FedEx were also big recipients of the refunds.
None of those companies have announced plans to reimburse customers who paid higher prices for the refunds.
Other companies, meanwhile, have suggested that select customers may be directly reimbursed in some situations.
As Fast Company previously noted, Costco has said it plans to return tariff refunds to its members “in some form,” without elaborating on the details of such a refund.
In July, CNN noted that Amazon also appears to have plans to refund some of its customers directly.
During the company’s most recent earnings call, Amazon chief financial officer Brian Olsavsky said that Amazon has “identified a limited set of circumstances where we can trace that we passed specific import charges on to customers, and when we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them.”
This story is developing …