TJX, Target and Lowe's Report Second-Quarter Results; Target Stock Rose 4.3% While TJX and Lowe's Fell
All three chains beat or met profit estimates for the quarter ended in early August 2026, and Target booked a $994 million refund of tariffs the Supreme Court struck down, but only Target's shares rose on the day.
Three Retailers, One Beat, Two Directions
Target's stock jumped 4.28% on August 19, 2026, closing at $159.00[8][14]. TJX, the parent of T.J. Maxx and Marshalls, fell 3.2% the same day[8]. Lowe's slid about 3%[9]. All three companies had just reported quarterly earnings that beat or matched Wall Street's expectations[1][4][7]. That's the puzzle sitting at the center of this earnings day: three retailers, three good-to-decent quarters, and two of them got punished anyway.
The gap starts to make sense once you look at where the good news actually came from. Target's profit got an unusual assist: $994 million in refunded tariffs, money the government is returning after the Supreme Court ruled the tariffs illegal[4][5]. TJX got a smaller version of the same boost. Investors, it turns out, don't treat that money the same way they treat a strong shopping season. And that's before you even get to the separate fight brewing over who that refund money actually belongs to.
What the Three Companies Actually Reported
TJX, which also owns HomeGoods, said sales at stores open at least a year rose 4% for the quarter ended August 1[1]. Diluted earnings per share came in at $1.36, up 24% from $1.10 a year earlier, and the company raised its full-year profit forecast[1][2]. Target's quarter, ended August 1 as well, brought net sales of $26.54 billion, up 5.3%, with comparable sales up 3.8%[4][5]. Store traffic rose 3.6% — meaning shoppers made more trips, not just bigger ones[4][5].
Lowe's had the weakest quarter of the three, for its fiscal period ended July 31. Comparable sales rose just 0.2%, and earnings per share were flat at $4.27 versus a year earlier[7]. The company pointed to a soft housing market and cautious do-it-yourself shoppers, and it guided toward the low end of its full-year sales range, around $92.0 billion[7][9].
Here's the number that changes how you read Target's report. Of Target's $4.11 in diluted earnings per share, the $994 million tariff refund accounted for roughly 40%[4][14]. Strip TJX's tariff benefit out the same way, and its earnings growth drops from a headline 24% to an adjusted 11%[1]. Both companies had real, ongoing improvement in their business. Both also had a one-time boost baked into the number that makes the headline.
Why a Refund Isn't the Same as a Good Quarter
To see why Wall Street cared about that distinction, you need the tariff backstory. Under a 1977 law called the International Emergency Economic Powers Act, or IEEPA, President Trump had imposed tariffs on imported goods[16]. In 2026 the Supreme Court struck those tariffs down, ruling the law didn't actually authorize them[16]. U.S. Customs and Border Protection then began sending the collected money back to the importers who'd paid it — about $100 billion refunded so far, with estimates of the total exposure running as high as $175 billion[15][16].
That refund is real money on these companies' balance sheets right now. But it's also money that arrives once. It doesn't repeat next quarter. Analysts routinely strip one-time items like this out of a company's results because their job is pricing the business's future earning power, not congratulating it on the past three months[1].
That's the logic behind the stock moves. Target rose because its comparable sales of 3.8% beat Wall Street's estimate of about 2.4% — a result that has nothing to do with the tariff refund[6]. TJX fell 3.2% despite beating estimates and raising guidance, because investors focused on its plan to spend more opening new stores and on a softer near-term outlook[8][17]. Target's own guidance makes the same point in numbers: full-year earnings guidance including the refund runs $9.90 to $10.90 a share, but excluding it, the range drops to $8.25 to $9.25 — a gap of about $1.65 a share riding entirely on a one-time item[4].
The Fight Over Who Actually Paid the Tariff
If the refund is one-time money for the companies, it raises an obvious question: whose money was it in the first place? Tariffs are collected from importers, not shoppers, at the border, by product code. But companies typically pass some of that cost on through higher shelf prices. So consumer advocates argue the tariff was effectively paid by the people buying the products, and the refund should follow the money back to them[10][11].
Senator Elizabeth Warren has pushed large corporations to return the refunded billions to customers directly[11]. Some shoppers have filed class-action lawsuits making the same argument[15]. The strongest piece of evidence for this camp is that at least one company has already done it: FedEx set aside roughly $800 million in tariff refunds to return to its own customers[10].
Target's answer, delivered by chief financial officer Jim Lee, is that the company won't cut checks to shoppers but will "invest in price" — meaning lower prices going forward rather than a refund tied to past purchases[19]. The retailers' underlying argument is that tariffs raised costs unevenly across thousands of products, and some of that cost got absorbed rather than passed on, so there's no clean per-customer amount to hand back[10]. That's a genuine accounting problem. It's also, notably, an answer that happens to let the companies keep the cash for now.
A Housing Slump, an Off-Price Bet, and a Traffic Number That Can't Be Faked
Behind the refund story, each company is also fighting its own separate battle. Lowe's problem is structural: home-improvement spending tracks the housing market — home sales, moving activity, mortgage rates — not general consumer mood[7][9]. That's why its comparable sales came in at 0.2% in the same quarter Target managed 3.8%[7]. A weak housing market doesn't turn around because a tariff gets refunded.
TJX is making the opposite bet. Its whole business model gets a tailwind when household budgets tighten, because shoppers trade down toward off-price retailers instead of full-price ones. Off-price means it sells brand-name goods bought as overstock or off-season at a discount, which is why belt-tightening customers flow toward it rather than away. That's the logic behind TJX raising its long-term target from its prior count to 7,500 total stores, even as its stock fell that day on the near-term cost of that expansion[17].
Target's traffic number matters because it's a signal that's hard to fake. Store traffic — how many shopping trips people actually made — rose 3.6%, and unlike a sales dollar figure, you can't manufacture that just by raising prices[4][5]. It's the clearest evidence that Target's operational turnaround under CEO Michael Fiddelke is showing up in real customer behavior, separate from anything tariff-related[6].
How the Coverage Split
Outlets covering the same numbers reached for different framings. CNBC led with Target's turnaround "picking up steam, with help from a big tariff refund" — putting the operational story first and the refund second, even though the refund supplied about 40% of the quarter's earnings per share[6]. The Star Tribune, Target's hometown paper, ran headlines asking directly "will shoppers see any savings?" — a framing that treats the refund as money already owed to customers[12].
Fortune's coverage carried a similar assumption in its structure, naming which companies were "giving customers a cut" and which weren't, which frames returning the money as the norm and keeping it as the exception[10]. Investor-focused sites like 24/7 Wall St. used words like "windfall" and led with the stock pop, largely accepting management's framing that the refund was pure upside[13]. A Forbes opinion column argued that "smart retailers" would turn refunds into price cuts — a contributor's argument, not a reporting claim, but one that assigns a moral label to the outcome it prefers[18].
What none of the coverage quite settled, and what remains open now, is what "investing in price" actually looks like in practice — and whether shoppers will be able to tell the difference between a price cut funded by a tariff refund and one that would have happened anyway.
Summary
Three big American retailers reported quarterly results this week. TJX, which owns T.J. Maxx, Marshalls and HomeGoods, said sales at stores open at least a year rose 4%[1]. Its earnings per share reached $1.36, up 24% from $1.10 a year earlier, and it raised its full-year forecast[1][2]. Target said net sales rose 5.3% to $26.54 billion and that shoppers made 3.6% more visits than a year ago[4][5]. Lowe's had the softest quarter: sales at established stores rose just 0.2%, and profit per share was flat at $4.27[7].
The number driving most of the argument is $994 million. That is the tariff money Target got back from the U.S. government[4][5]. In 2026 the Supreme Court struck down tariffs that President Trump had imposed using the International Emergency Economic Powers Act, a 1977 law meant for emergencies[16]. Customs began sending refunds to importers, about $100 billion so far[15]. Target's refund made up roughly 40% of its earnings per share for the quarter[14]. TJX also benefited: strip the refund out and its adjusted EPS rose 11% to $1.22, not 24%[1].
That sets up the real dispute. It is not whether the quarter was good. It is who the refund money belongs to. Target's chief financial officer, Jim Lee, said the company will not cut checks to shoppers but will 'invest in price'[19]. Senator Elizabeth Warren has pressed large companies to return the money to customers, arguing shoppers paid the tariffs in higher prices[11]. Some Americans have filed class-action suits making the same claim[15]. Companies answer that the tariffs raised their costs in scattered, hard-to-trace ways, so there is no clean per-customer refund to give back[10].
The stock reaction was not uniform. Target closed at $159.00, up 4.28%, after dipping in premarket trading[14]. TJX fell 3.2% even though it beat estimates and raised guidance; investors focused on its plan to spend more on opening stores and on a soft near-term forecast[8][17]. Lowe's slid about 3% as it pointed to a weak housing market and cautious do-it-yourself shoppers[9].
The Event
On August 19, 2026, TJX Companies, Lowe's and Target each released results for their fiscal second quarters, which ended August 1 for TJX and July 31 for Lowe's[1][7]. TJX reported comparable sales up 4% and diluted earnings per share of $1.36, and raised its full-year outlook[1]. Target reported net sales of $26.54 billion, up 5.3%, comparable sales up 3.8%, and diluted EPS of $4.11, a figure that included $994 million in refunded tariffs[4][5]. Lowe's reported comparable sales up 0.2% and diluted EPS of $4.27, flat against the year-earlier quarter, and set its full-year outlook at the low end of its prior range[7].
Undisputed Facts
- TJX reported second-quarter fiscal 2027 diluted earnings per share of $1.36, up 24% from $1.10 a year earlier, with comparable sales up 4%[1].
- TJX raised its full-year fiscal 2027 diluted EPS outlook to a range of $5.31 to $5.36 and its pretax profit margin outlook to 12.3%–12.4%[1].
- Target reported net sales of $26.54 billion, up 5.3%, with comparable sales up 3.8% and comparable traffic up 3.6%[4][5].
- Target's results included $994 million in refunds of tariffs collected under the International Emergency Economic Powers Act[4][5].
- Lowe's reported second-quarter comparable sales up 0.2% and diluted EPS of $4.27, the same as the prior-year quarter; adjusted EPS rose 1.6% to $4.40[7].
- The U.S. Supreme Court struck down the IEEPA tariffs, and U.S. Customs and Border Protection began issuing refunds to importers in 2026[15][16].
- About $100 billion in tariff refunds had been paid out to companies as of early August 2026[15].
- Target shares closed at $159.00 on August 19, 2026, up 4.28%, while TJX shares fell 3.2% and Lowe's shares slid about 3%[8][9][14].
The Pressure
Strip away the moralizing and blame. What structural realities persist regardless of which narrative wins?
- One-time money is worth less than repeat money
- A refund lands once. Traffic and comparable sales repeat. Analysts price the second and discount the first, which is why Target's guidance excluding refunds ($8.25 to $9.25) matters more to the stock than the guidance including them ($9.90 to $10.90)[4].
- Off-price wins when budgets tighten
- TJX's structural advantage is that trading down is a move toward it, not away. That is why it raised its long-term store target to 7,500 even as its stock fell on near-term spending[17].
- Home improvement follows housing, not shopping
- Lowe's demand tracks home sales, moving costs and mortgage rates, not general consumer confidence. That is why its comps were 0.2% in a quarter when Target's were 3.8%[7][9].
- Refunds are untraceable by design
- Tariffs are levied on importers by product code, not on shoppers by receipt. Once a company absorbs part of the cost, shifts sourcing, or changes its product mix, there is no per-customer figure to refund — which is a genuine accounting fact and also a convenient one for retailers[10].
Material realityThree large retailers reported a quarter with real operating improvement at two of them and flat results at the third[1][4][7]. Target's traffic rose 3.6%, which cannot be manufactured by pricing[5]. Separately, about $100 billion in tariff money is moving from the U.S. Treasury back to importers because the Supreme Court found the IEEPA tariffs were not authorized by that law[15][16]. Those two things happened in the same earnings report but are not the same event. The refund money sits on corporate balance sheets now. Whether it reaches shoppers depends on pricing decisions no company has committed to in a measurable way. Target's CFO said the company will 'invest in price' but ruled out direct refunds[19]. Meanwhile the housing market stayed weak enough that Lowe's cut its outlook to the low end of its range[7][9].
Narrative as a weaponThree groups are shaping how this quarter reads. Retail management wants the refund read as a bonus on top of a genuine operating recovery — hence Target leading with its turnaround and traffic rather than the $994 million. Consumer advocates and Senator Warren want it read as a tax refund that stopped at the wrong door, and FedEx's decision to return roughly $800 million to its customers is their best single piece of evidence[10][11]. Tariff supporters want it read as a narrow legal ruling about which statute the president used, not a verdict on whether tariffs work. Investors, whose votes actually moved the prices, ignored all three frames and asked a fourth question: what does next quarter look like without the refund? That question, not the political one, explains why a company that beat estimates and raised guidance still fell 3.2%[8].
How Each Side Sees It
Each major actor’s view — how it frames things, its underlying incentive, and how it’s materially affected. Tap a side to read it.
Frames it asThe companies argue the quarter shows operating improvement, not just a refund windfall. Target points to traffic: 3.6% more shopping trips than a year ago, plus digital comparable sales up 8.7%[4][5]. Traffic is the cleanest signal in retail because it cannot be faked by raising prices. TJX makes a market-share argument: when budgets are tight, shoppers trade down to off-price, and TJX raised its long-term store target to 7,500 locations on that logic[17]. On the refund, their position is that the money is not a pot of consumer cash. Tariffs raised landed costs across thousands of products; companies absorbed some, changed assortments, and shifted sourcing[10]. So the honest way to return value, they say, is lower shelf prices going forward — which is what Target's CFO Jim Lee meant by 'invest in price'[19].
WhyProtect margins and share price while the turnaround narrative holds. Target's stock is up about 60% year to date, far ahead of Walmart's 4%, so management has a strong interest in keeping investors focused on traffic and merchandising rather than on the one-time refund[6].
Impact on themTarget's operating income rose 94% year over year to about $2.6 billion, with the refund a major part of that[6]. Its full-year EPS guidance is $9.90 to $10.90 including refunds, but $8.25 to $9.25 excluding them — a gap of about $1.65 a share that shows how much rides on a one-time item[4]. Lowe's is the exception: a weak housing market and cautious DIY customers pushed it to guide to the low end, roughly $92.0 billion in sales[7][9].
Frames it asTheir case is simple and moral: shoppers paid the tariff, so shoppers should get the refund. Tariffs are collected from importers, but importers raise prices, so the cost lands on households. Warren has publicly pressed large corporations to return the billions to consumers[11]. The strongest specific evidence they point to is that some companies already do it. FedEx set aside roughly $800 million in tariff refunds to return to its customers[10]. If a shipper can trace and refund the money, the argument goes, a retailer's claim that it is untraceable is a choice, not a law of accounting. Class-action plaintiffs have made the same claim in court[15].
WhyEstablish the principle that a government refund of a consumer-borne tax does not become corporate profit by default. That principle would apply well beyond this one quarter.
Impact on themLittle direct financial stake, but high political stake. Tariffs were a signature Trump policy, and the refund fight keeps the cost of tariffs in the news at the point where households can see it.
Frames it asTheir crux is different from everyone else's: they ask what next quarter looks like, not what this one contained. On that test, a beat powered by a one-time refund is worth less than a beat powered by traffic. That explains the split reaction. Target rose because comparable sales of 3.8% beat estimates of about 2.4% — an operating result[6]. TJX fell 3.2% despite beating and raising, because its plan to speed up store openings means more spending now, and its near-term guidance came in soft[8][17]. Lowe's fell because it narrowed guidance to the bottom of its range[7][9].
WhyPrice the durable earnings power of each company. Analysts routinely strip out one-time items for exactly this reason, which is why TJX's adjusted 11% EPS growth, not the headline 24%, is the figure they trade on[1].
Impact on themThe day's moves cut both ways across the sector, which is why 'retail stocks broadly gained' does not describe what happened to these three names[8][9][14].
Frames it asSupporters of the tariffs argue the refunds are a court-ordered accounting event, not evidence the policy failed. Their point is that the same quarter shows a consumer who kept spending through the tariff period, with Target traffic up and TJX comps up 4%[1][5] — which they read as proof the predicted tariff-driven collapse in consumer demand did not arrive. They also note the tariffs were struck down on legal authority grounds — whether IEEPA, an emergency-powers law, could be used this way — and not on a finding that tariffs harmed consumers[16].
WhyPreserve the case for tariffs as a tool while the legal basis is rebuilt under other statutes.
Impact on themThe refunds are a direct fiscal cost. Estimates of the total exposure ran as high as $175 billion, against about $100 billion paid out so far[15][16].
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The Bias Ledger average rating 4.2
The same story, as framed by outlets across the spectrum, ordered least to most biased. The bias score (1 = straight, 10 = heavily spun) is an AI assessment of that framing — click an outlet to see its track record. The tell is the word choice or omission that reveals the angle.
| Outlet | Vantage | Bias | How they frame it | The tell |
|---|---|---|---|---|
| The Motley Fool | U.S. retail-investor advisory | 2 | 'Why TJX Stock Dropped Today.' | Straight cause-and-effect reporting of the 3.2% decline, but the outlet's business is stock recommendations, so 'why it dropped' pieces tend to end on a reassuring long-term note. |
| CNBC | U.S. center, business press | 3 | Frames the quarter as Target's turnaround 'picking up steam, with help from a big tariff refund.' | The refund is placed in the headline but as a helper clause, and the turnaround gets top billing. That ordering favors management's preferred story over the fact that the refund supplied about 40% of EPS. |
| Star Tribune | U.S. center-left, Target's hometown paper | 4 | Two angles: 'Target quarterly profits double, buoyed by $1B tariff refund' and 'Will shoppers see any savings?' | The second headline poses the consumer question directly, which frames the refund as money owed to shoppers before the article establishes that it is. Hometown coverage also gets close access to management. |
| Fortune | U.S. center-left business magazine | 5 | 'Fortune 500 companies got billions in tariff refunds. Here's who's giving customers a cut—and who isn't.' | The naming-and-shaming structure builds in a moral default: giving customers a cut is the norm, not giving is the deviation. The reporting on FedEx and UPS is specific and checkable, but the frame presumes the answer. |
| 24/7 Wall St. | U.S. market-friendly investor site | 5 | 'Target Rises 5% on Q2 Beat, Tariff Refund Windfall, and Sharply Raised Full-Year Outlook.' | 'Windfall' and 'sharply raised' are both upside words, and the stock move leads. The headline percentage also differs from the reported 4.28% close, a sign of intraday versus closing figures being used interchangeably. |
| Forbes (Opinion) | U.S. business, contributor column | 6 | 'Consumers Won't See Tariff Refunds. Smart Retailers Will Turn Them Into Price Cuts.' | A contributor column, not newsroom reporting. 'Smart retailers' does the argument's work — it awards the label to the outcome the writer prefers, framing price cuts as strategy rather than obligation. |
References
- TJX Reports Q2 FY27 Results; Above-Plan Comp Sales Growth of 4% — The TJX Companies · Primary source — company press release; promotional by nature
- TJX Companies Inc /DE/ — Form 8-K, Q2 FY27 earnings press release — U.S. Securities and Exchange Commission · Primary source — mandatory federal filing
- TJX Q2 Earnings: EPS $1.36; FY27 Guidance Up — StockTitan · U.S. investor-news aggregator; republishes company releases
- Target Corporation Reports Second Quarter Earnings — Target Corporation · Primary source — company press release; promotional by nature
- Target Corp — Form 8-K, Exhibit 99, Q2 2026 results — U.S. Securities and Exchange Commission · Primary source — mandatory federal filing
- Target says its turnaround is picking up steam, with help from a big tariff refund — CNBC · U.S. center, business press owned by Comcast/NBCUniversal
- Lowe's Reports Second Quarter 2026 Sales and Earnings Results — Lowe's Companies · Primary source — company press release; promotional by nature
- Why TJX Stock Dropped Today — The Motley Fool · U.S. retail-investor advisory; subscription stock-picking business
- Lowe's stock falls as company confronts 'reality' of tariffs, sluggish housing market — Yahoo Finance · U.S. center, business aggregator with original desk reporting
- Fortune 500 companies got billions in tariff refunds. Here's who's giving customers a cut—and who isn't — Fortune · U.S. center-left business magazine
- Warren Pushes Giant Corporations to Give Billions in Tariff Refunds Back to Consumers — Office of U.S. Senator Elizabeth Warren · Primary source — press release from a Democratic senator; advocacy document
- Target collected $1B tariff refund. Will shoppers see any savings? — Star Tribune · U.S. center-left Minneapolis daily; Target's hometown paper
- Target Rises 5% on Q2 Beat, Tariff Refund Windfall, and Sharply Raised Full-Year Outlook — 24/7 Wall St. · U.S. market-friendly investor site, ad-supported
- Target Shares Dip 3% as Tariff Refund Drives 40% of Q2 Earnings Per Share — TS2 · Independent tech/finance aggregator; low editorial transparency — treat as secondary
- The Trump administration has doled out $100 billion in tariff refunds, but Americans are suing U.S. companies for not seeing a penny of the returns — Fortune · U.S. center-left business magazine
- A Supreme Court Ruling Against Trump's Tariffs Could Trigger Up to $175 Billion in Refunds — The Globe and Mail · Canadian center-right national daily; this item is syndicated market commentary, not staff reporting
- TJX Bets Bigger On Brick-And-Mortar, Lifts Global Store Target To 7,500 — Benzinga · U.S. investor-news site, trader-oriented
- Consumers Won't See Tariff Refunds. Smart Retailers Will Turn Them Into Price Cuts — Forbes · U.S. business magazine; this is a contributor opinion column, not newsroom reporting
- Target receives almost $1 billion in tariff refunds, plans to lower prices — Modern Retail · U.S. retail trade publication (Digiday Media); industry-facing