Retail Earnings Could Assess Consumers’ Post-Tariff Health

This week will see Walmart and other major U.S. retailers report their quarterly earnings.

And as Bloomberg News noted in a report Saturday (Aug. 16), these numbers will offer a glimpse into how U.S. consumers are coping with White House tariffs.

While consumer spending has been resilient over the past few years, the report said that investors will want to see how long Americans can keep that up amid tariffs, cooling job growth and ongoing inflation.

Consumer sentiment fell 5% in August, the first such dip in four months, according to data from the monthly University of Michigan survey released last week.

The drop in sentiment has been driven mainly by a 10% downturn in the current index, which gauges assessments about personal finances. As the university’s report put it, this decline “largely stems from rising worries about inflation.”

With that in mind, the Bloomberg report said, earnings reports and outlook forecasts from the likes of Walmart, Target, Home Depot and Lowe’s will provide a useful picture of how economic conditions are impacting shoppers and the stores they patronize.

“These reports are going to be very important,” Keith Lerner, co-chief investment officer at Truist Advisory Services, told Bloomberg. “The question that Wall Street and investors are trying to figure out is: We see the tariff numbers going up, are they being passed through, or are the companies’ profit margins getting squeezed?”

Research by PYMNTS Intelligence has tracked the impact of the tariffs on consumers throughout the spring and summer. For example, June’s “Stock Out” survey showed 47% of American shoppers said they could not find or afford everyday items because tariffs led to supply chain disruptions or higher price tags.

The tariffs have also made trading down the default mode of shopping for many consumers. Almost a third of consumers interviewed said they had delayed or canceled discretionary buys — electronics, home décor, even back-to-school supplies — while 42% said they had begun comparing prices at three or more retailers before purchasing, compared to 27% in January. 

Against this backdrop, PYMNTS analysts warn that prolonged out-of-stocks can “train” shoppers to think of once-routine purchases as risky, weaving thrift into their long-term habits and weakening lifetime customer value for brands.

“Tariffs are no longer an abstract policy lever,” PYMNTS wrote earlier this month. “They are a daily pain point at the checkout aisle. Retailers must brace for a consumer who is both price-sensitive and chronically unsure whether the product will even be on the shelf.”

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