Target received a $994 million pre-tax tariff refund in the second quarter, helping double operating income and prompting the US retailer to raise its full-year outlook on 19 August after the US Supreme Court overturned tariffs imposed by the Trump administration.

The refund boosted Target’s second-quarter operating income to $2.6 billion, compared with $1.3 billion a year earlier, while net income doubled to $1.9 billion. The company said the reimbursement contributed 3.7 percentage points to its 9.6 per cent operating margin for the quarter.

The refund followed the US Supreme Court’s February ruling that struck down tariffs imposed under the International Emergency Economic Powers Act. Chief financial officer Jim Lee said the $994 million payment represented a “significant majority” of the tariff refunds Target expects to receive.

Target is one of a number of major US retailers receiving repayments after the court ruling. TJX said it received $331 million in tariff refunds during its latest quarter, while Home Depot received $685 million, according to the Financial Times.

The scale of the Target payment reflects the retailer’s reliance on imported merchandise, particularly in categories such as home furnishings and beauty products. The company has been reducing its dependence on China, with about 30 per cent of its own-brand goods now sourced from the country, down from 60 per cent in 2017.

The refund came as Target continued efforts to absorb the impact of tariffs rather than pass the full cost on to shoppers. The company said it had held down prices during 2025 and cut prices on more than 10,000 products over the past year.

Chief executive Michael Fiddelke said Target would remain focused on pricing as part of its broader turnaround strategy. “We have and will continue to invest in price,” Lee said when asked how the company would use the tariff refunds.

Target’s second-quarter net sales rose 5.3 per cent to $26.5 billion, while comparable sales increased 3.8 per cent for the three months to 1 August. The company raised its full-year earnings forecast to between $9.90 and $10.90 per share, from $7.50 to $8.50 previously, and increased its revenue forecast to $110.02 billion.

The refund was not the only tariff repayment recorded by US companies this quarter. Estée Lauder reported a $38 million benefit to its cost of sales from tariff refunds, although the cosmetics group said this only partially offset the expected $102 million full-year impact of additional tariffs.

The US government has continued to process repayments following the Supreme Court ruling, with a court filing by customs officials showing that about $100 billion had been returned to businesses by early August.

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