By MICHELLE CHAPMAN

Retailers are trying to navigate their way through economic uncertainty in 2025. Tariffs, inflation and lingering fears of a recession have left many Americans uneasy and pulling back on spending.

Because consumer spending accounts for about 70% of U.S. economic activity, a retreat would heighten the odds of contraction for the U.S. economy.

With earnings from major retailers wrapping up it’s become clear that the trade war launched by the Trump administration is impacting retailers in very different ways.

Walmart earned a public rebuke from President Donald Trump after it said last week that it has already raised prices and will have to do so again this summer, right when the back-to-school shopping season kicks off. Trump told the retail giant that it should “eat” the additional costs created by his tariffs.

Home Depot said Tuesday that it doesn’t expect to raise prices because of tariffs, saying it has spent years diversifying the sources for the goods on its shelves. However, executive Billy Bastek said some products on Home Depot shelves now may disappear. “There’s items that we have that could potentially be impacted from a tariff that, candidly, we won’t have going forward,” Bastek said in a conference call with industry analysts.

While retailers are sorting out how to best operate in a trade war, their customers are taking stock of their finances and the trends are not good. U.S. consumer sentiment declined slightly in May for the fifth straight month, surprising economists, as Americans increasingly worry that President Donald Trump’s trade war will worsen inflation.

The preliminary reading of the University of Michigan’s closely watched consumer sentiment index, released Friday, declined 2.7% on a monthly basis to 50.8, the second-lowest level in the nearly 75-year history of the survey. The only lower reading was in June 2022. Since January, sentiment has tumbled nearly 30%.

Here’s a quick look at some poignant details from retailers reporting quarterly financial results Wednesday.

Target

Target’s sales dropped more than anticipated in the first quarter, and the retailer warned they will slip for all of 2025 year as its customers, worried over the impact of tariffs and the economy, pull back on spending.

Target also cut its annual sales projections. The company now expects a low-single digit decline for 2025 after previously projecting a 1% increase for sales.

Chairman and CEO Brian Cornell said during Target’s conference call that the chain has been dealing with multiple issues impacting its business, including tariffs and declining consumer confidence.

“We have many levers to use in mitigating the impact of tariffs and price is the very last resort,” he said. “Our strategy is to remain price competitive by leveraging the capabilities, long-standing relationships and the scale that set us apart from many of our retail peers.”

TJX

TJX Cos., parent of T.J. Maxx, Marshalls and other stores, has been pegged as one of the potential “winners” of the shifting trade landscape, as Americans try to save money.

That appeared to be the case Wednesday as the company beat both revenue and profit expectations on Wall Street.

And CEO Ernie Herrman said the second quarter is off to a strong start.

“I am convinced that our broad assortments of great brands and fashions, at compelling prices, will continue to be a tremendous draw for shoppers seeking value,” he said. “Further, I am confident that the strength, flexibility, and resiliency of our off-price business model will serve us well in today’s macro environment, as it has throughout our long, successful history.”

TJX maintained its fiscal 2026 forecast, which includes guidance for consolidated same-store sales to be up 2% to 3%.

Lowe’s

Lowe’s first-quarter sales declined slightly to $20.9 billion from $21.4 billion a year earlier, but that was better than Wall Street expected, with the U.S. housing market in a slump.

The home improvement company reaffirmed its 2025 outlook for sales in a range of $83.5 to $84.5 billion. It still expects same-store sales to be flat to up 1%.

President and CEO Marvin Ellison said during the company’s conference call Wednesday that approximately 60% of Lowe’s purchases originate in the U.S. and about 20% of its purchase volume is currently concentrated in China.

“Although we’re pleased with this reduced dependency, we’re not satisfied and we’re working to accelerate our diversification efforts,” he said of the company’s product sourcing.

Ellison added that Lowe’s expects to continue to be competitive on its prices.