Live Markets: Retail companies set for tariff refund windfall

Kohls

13/04/2026 15:32

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RETAIL COMPANIES SET FOR TARIFF REFUND WINDFALL

Following the U.S. Supreme Court's February ruling that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unconstitutional, questions were raised about whether the companies that paid tariffs under the IEEPA umbrella would receive refunds for the amount.

According to a Citi Research report published on April 10, these refunds could represent a meaningful percentage of some companies' enterprise values, potentially providing them with a substantial cash infusion.

The U.S. Court of International Trade said on March 4 that refunds are in fact owed to those who paid these tariffs. Citi noted that while the administration has implemented new tariffs under Section 122 of the Trade Act of 1974, it does not change the idea that refunds are coming back at some point in the future.

Which companies stand to gain?

According to Citi's analysis, several retailers could see refunds amounting to 5% or more of their enterprise value. Kohl's KSS.N is leading the pack with estimated refunds representing a substantial 23% of its enterprise value.

Meanwhile, Carter's CRI.N and Under Armour UAA.N could receive 8% and 6% of their enterprise value, respectively. Oxford Industries OXM.N, Macy's M.N, American Eagle Outfitters AEO.N and Gap GAP.N could see 5% of enterprise value, each in potential refunds.

However, Citi noted that most management teams are taking a cautious approach, not recording any receivables or building refunds into their guidance. When asked about potential uses for refund proceeds, executives typically indicate they will consider options including business investment needs, share repurchases, debt reduction, and increasing cash reserves.

Many companies are also expected to share at least some of the refund proceeds with suppliers who helped absorb the initial tariff costs, the report said.

It is also worth noting that whether a company was able to mitigate tariff pressure through pricing or other methods does not affect its eligibility for refunds, with those who paid the tariffs entitled to potential refunds regardless of how they handled the financial impact, per the report.

This rare event creates a unique opportunity for investors to identify companies about to receive an unexpected cash injection, particularly those where refunds represent a significant portion of enterprise value, Citi said.

(Ragini Mathur)

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