Good morning. One of the more interesting threads from recent earnings calls: companies are handling tariff refunds very differently, and the amounts involved are substantial.
The refunds stem from a February Supreme Court ruling that forced Customs and Border Protection to start returning duties collected under a since-struck-down law. That money is now showing up on the books of big companies like Home Depot, Amazon, and Walmart, each with its own approach.
Home Depot
The retailer collected $730 million in IEEPA tariff refunds in a single quarter, arriving in a lump sum near the end of June. CFO Richard McPhail said on Tuesday’s Q2 call that $685 million of that related to inventory already sold, cutting cost of goods sold immediately and producing a 145 basis point gross margin benefit. The remaining $45 million is still sitting in inventory and will flow through as that inventory sells.
That 145-basis-point benefit got trimmed by 60 basis points of unplanned cost inflation, leaving 85 basis points. A separate 60-basis-point drag from acquisition-related mix brought the net year-over-year gross margin improvement down to 25 basis points.
Billy Bastek, EVP of merchandising, pointed to resin, metals, fuel and energy costs that weren’t in Home Depot’s original 2026 plan, plus a shifting trade landscape: the prior tariff regime expired in July and was replaced by a new Section 301 regime targeting imports tied to forced labor. Home Depot folded the refund into its reaffirmed outlook and is using it defensively, to absorb cost inflation rather than cut prices.
The retailer beat expectations in Q2 as sales and comparable-store growth picked up, but cautious consumers and rising costs kept the recovery uneven.
Amazon
Meanwhile, Amazon CFO Brian Olsavsky disclosed roughly $600 million in Q2 tariff refunds on the July 30 call, calling it “the significant majority” of what Amazon expects to receive overall. Paired with a separate $600 million fair value benefit on AWS energy contracts, the two together cut operating expenses by about $1.2 billion for the quarter.
Olsavsky said Amazon’s total trails peers partly because it “was not the importer of record for the large majority of items sold in our store,” a reminder that refunds go to whoever paid the duty at the border, not necessarily the retailer selling the goods. Amazon had also stockpiled inventory ahead of the tariffs, limiting its exposure from the start.
Another important factor—Amazon plans to pass some of the money back to customers.
“We’ve identified a limited set of circumstances where we can trace that we’ve passed specific import charges onto customers, and when we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them,” Olsavsky said.
Walmart
Walmart is taking a third path. CFO David Rainey said on the May earnings call the retailer is pursuing refunds that could total about $2.4 billion, and plans to steer that money toward price investment rather than margin, while keeping it out of guidance. Rainey called the refund “a relatively small part” of Walmart’s business, under half a percent of U.S. sales. The company is committing it to lower prices, he said.
Sheryl Estrada
Sheryl.Estrada@fortune.com
Leaderboard
Fortune 500 Power Moves
William "Bill" Grogan was appointed CFO of GE HealthCare (No. 217), effective Sept. 14. Grogan succeeds Jay Saccaro, who, as previously announced, stepped down for an expanded role outside the medical technology industry. George Newcomb, who is serving as interim CFO, will continue in his role as controller and chief accounting officer. Grogan joins GE HealthCare from Xylem Inc., where he has served as EVP and CFO since 2023. Before Xylem, Grogan spent more than a decade at IDEX Corporation, including serving as SVP and CFO from 2017 to 2023. Earlier in his career, Grogan held finance leadership positions at Walgreens, Crane Co., and Sears Holdings Corp.
The weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
More notable moves
Edmund Reese will transition from his role as EVP and CFO of Aon plc (NYSE: AON), a global professional services firm, effective immediately, to pursue opportunities outside the firm. Aon appointed Nadin Virani as interim CFO, effective immediately, and Reese will serve as senior advisor to Aon president and CEO Greg Case, through Aug. 16, 2027. Aon has selected an executive search firm to conduct an internal and external search for a permanent CFO.
Charles Roscopf was promoted to SVP, CFO at Upland Capital Group, Inc., a specialty property and casualty insurer. Roscopf initially joined Upland as VP of capital markets in August 2025. He succeeds Mark Morrison, EVP and CFO, and one of the co-founders of Upland, who will transition to a new role as senior adviser at Upland, and vice chair of the board of Upland Specialty. Over the last 10 years, Roscopf held chief accounting officer, controller, and financial reporting roles at PE- and family-office-backed financial services companies. He began his career at EY, where he spent six years as an independent auditor.
Big Deal
Companies rushing to hand customer service over to AI might want to leave a door open. A Gartner survey finds 87% of customers say a company using generative AI for customer service must still offer a way to reach a human agent, even as half of customers say the technology actually makes service interactions easier. It's a signal that automation without an easy human escape hatch could backfire, no matter how capable the AI gets.
"Service leaders should not use generative AI as a mandatory first step for every issue," according to Eric Keller, a senior director analyst in the Gartner Customer Service and Support Practice. "When customers are forced through multiple unsuccessful AI interactions before they can reach a person, they are less likely to use that tool again." Generative AI is more helpful when it collects information, understands intent and attempts resolution only when confidence is high, with a clear path to human support, he stated.
Going deeper
"The IRS is scrutinizing how UnitedHealth moved money through foreign subsidiaries—and whether it underpaid taxes" is a Fortune article by Tatiana Sataua.
Sataua writes: "UnitedHealth Group is contesting an Internal Revenue Service proposal to increase its taxable income over how it priced transactions with one of its foreign subsidiaries, a dispute the company disclosed in a quarterly filing in May and repeated in its August filing. The notices cover transactions between UnitedHealth and a foreign subsidiary from the 2017 through 2020 tax years." Read more here.
Overheard
"Once a day now, I force myself to make an old-fashioned phone call. Not a Zoom. Not a Teams meeting. Not a recorded conversation with an AI note taker quietly humming in the background."
—Maria Colacurcio, CEO of pay equity software company Syndio, writes in a Fortune opinion piece. After Colacurcio makes an "old-fashioned phone call," she reconstructs the conversation from memory. "I have to remember what was said, identify the themes, connect the dots, and then summarize it for my AI agents," she writes. "In other words, I make myself do the work first. The technology comes second."