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Target profits jump after nearly $1bn tariff refunds
Target said the $994 million pre tax reimbursement lifted second quarter operating income to $2.6bn, up from $1.3bn a year earlier.
Target said it received almost $1bn in tariff refunds from the US government, a move that boosted the retailer’s latest profits. The company reported a $994 million pre tax reimbursement, which it said doubled its second quarter operating income to $2.6bn from $1.3bn last year, according to BBC Business.
The retailer is among businesses receiving tax rebates on imported goods after a Supreme Court ruling found that a wave of President Donald Trump’s import tariffs were unlawful. Still, Trump has continued imposing duties on some imports through other legal means, meaning many companies remain exposed to additional taxes.
BBC Business also noted that Trump announced a three day delay for new import taxes on certain Canadian goods as negotiations for a trade deal continue. The report said Trump has threatened a 50% levy on nearly $20bn worth of imports from Canada, while economists have warned tariffs can raise consumer prices as businesses pass on added costs.
Target attributed earlier outlook cuts to a challenging environment during a period of tariff introductions and said it aims to reduce its reliance on China for sourcing products. The company said China accounts for 30% of its store label goods, down from 60% in 2017, and that many of its biggest sellers are in non essential categories such as home furniture and beauty products.