Retailers are getting antsy over consumer environment, tariffs
Walmart and Target haggle with suppliers
Walmart (WMT) and Target (TGT) were among the first to share their plans to manage tariff risks.
"We're not immune to [tariffs], but we typically will work with suppliers on this," Walmart CFO John David Rainey told Yahoo Finance. "We'll shift supply where we need to. We can lean into our private brands. There's a lot of tools that we have that to try to keep those prices low for customers."
Rainey said the company has not raised prices yet but will likely pass along some increases to consumers if costs rise.
Meanwhile, Target cut its long-term outlook, which factored in the ripple effects from tariffs. Target's CFO warned investors on the company's earnings call that it was unsure what the eventual impact would be on consumer demand.
Both big box stores are now bargaining with their suppliers to ensure they can keep costs low.
"Walmart has tremendous purchasing power and the ability to negotiate," Telsey Advisory Group's Joe Feldman told Yahoo Finance, noting its efforts to maintain low consumer prices.
Department stores expect adverse impacts
Department store retailers have also grown wary of tariff fallout and stretched consumers.
Macy's (M) issued a weaker-than-expected outlook in early March, which CEO Tony Spring explained as "a prudent approach" due to heightened uncertainty.
"There's a lot of changes that we're seeing day-to-day happening with tariffs," Macy's CFO Adrian Mitchell added on the company's earnings call. "We recognize the inflationary pressure."
Kohl's (KSS) CFO Jill Timm shared a similar sentiment regarding that company's lower guidance, saying that it will take time "to make necessary changes."
Specialty apparel retailer Abercrombie & Fitch (ANF) also posted weaker-than-expected 2025 guidance partially due to tariffs' impact on freight costs and consumer spending.
"We expect the first half will be adversely impacted by higher year-over-year freight costs and more normalized carryover inventory selling, and the second half will benefit from expected lower freight than last year," Abercrombie CFO Robert Ball told investors on a call, adding that the company's outlook includes current tariffs on China, Canada, and Mexico but not "other potential incremental tariffs."
Ball later added the team has taken action to avoid raising prices and is "mindful" of customers' value perception. He said the company won't make "significant changes" but hinted a slight price hike could be on the table.
Trade-down accelerates, potentially boosting discounters
Should heightened uncertainty around tariffs slow the US economy further, Dollar General (DG) CEO Todd Vasos expects "trade down [among consumers] to accelerate" as shoppers look for bargains. That could make discount stores more appealing.
Vasos told investors last week on a call that the company is "not anticipating improvement in the macro environment, particularly for our core customer." He added that lower-income consumers are in an "already stressed financial condition."
Higher costs from tariffs are expected to hit lower-income consumers who are already struggling, S&P Global Ratings retail director Matt Todd told Yahoo Finance. Roughly 60% of Dollar General sales come from a household with an income of less than $35,000.
Investors will learn more about how discount retailers are faring when Dollar Tree (DLTR) reports earnings on Wednesday before the market open. In particular, analysts will be watching for Dollar Tree's tariff mitigation strategy and whether it expects tariffs to negatively impact margins.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at
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