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business20h ago
Retail had a 'surprisingly robust' first quarter, but the real test is ahead as tax refunds dry up
- Retailers posted stronger first-quarter profits and sales as tax refunds and BNPL use supported consumer spending.
- Analysts warn that as tax refunds fade, consumer pressure from gas prices could intensify in Q2.
- Target and Walmart cited tax refunds as a factor in quarterly gains, while cautioning that benefits will fade.
- Some retailers, including Ross and Wayfair, reported notable gains partly attributed to stimulus effects.
- BNPL adoption rose across income groups, potentially fueling discretionary spending during Q1.
- Executives warned that consumer sentiment declined recently, requiring close monitoring of spending trends.
- Walmart and TJX reported solid quarterly results but issued more conservative guidance for the coming quarter.
- E.l.f. Beauty beat top and bottom lines but issued a weaker guidance due to perceived consumer strain.
- Analysts expect the market to normalize as tax refunds fade and inflation remains a factor.
- Retailers expect higher fuel prices to pressure consumers as tax refunds decline in 2026.
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