Retailers are living through a weird kind of inflation right now. Not the everything-is-on-fire version, and not the it's-over version either. Call it the uneven version: fuel and freight costs keep grinding higher, product prices move in different directions depending on what aisle you're standing in, and shoppers remain stubbornly picky about anything discretionary.
The result is a group of major U.S. retailers all fighting the same battle with different playbooks. Some are absorbing costs. Some are negotiating harder with suppliers. Some are getting tariff refunds and handing them straight back to customers. And a surprising number are still raising their full-year outlooks anyway.
What almost none of them are doing is passing the full cost increase on to shoppers. Competition for price-sensitive consumers has a way of keeping pricing power in check.
Fuel and Freight Keep Eating Into Margins
Start with the boring-but-expensive stuff: getting products to stores.
John David Rainey, CFO of Walmart Inc. (WMT), said the company expects more than $2 billion in incremental fuel-related expenses during the fiscal year, above its original guidance assumptions, assuming fuel prices stay near current levels. That's not a rounding error, even for a company Walmart's size.
Ross Stores, Inc. (ROST) expects domestic freight to remain a margin headwind in the second half. The TJX Companies, Inc. (TJX) is bracing for higher fuel and freight rates in the second half, plus extra pressure from trucking capacity and driver unavailability. Williams-Sonoma, Inc. (WSM) built its second-half guidance around fuel prices staying close to where they are now.
And then there's Kroger. David Kennerley, CFO of The Kroger Co. (KR), put it plainly: "We have assumed that we will get some incremental headwinds from diesel and freight costs through the balance of the year."
Translation: nobody is planning for relief.
Product Inflation Is All Over the Place
If fuel is the predictable headache, product pricing is the migraine that moves around.
Costco Wholesale Corporation (COST) reported overall inflation in the low single digits during its fiscal fourth quarter. But dig in and it gets lumpier. Non-food inflation showed up, particularly in consumer electronics because of memory costs, along with gasoline and petroleum-related products. Costco described a relatively stable inflation environment with significant uncertainty on the outlook, which is corporate-speak for "your guess is as good as ours."
Best Buy Co., Inc. (BBY) told a stranger story. Computing average selling prices rose in the mid-teens during the second quarter, while unit volumes fell by a high-single-digit percentage. Fewer units, much higher prices. Management said similar pricing dynamics could continue through the rest of the year.
Ross Stores expects average unit retail prices to rise by a low-single-digit percentage during the second half of 2026. CEO Jim Conroy kept expectations modest: "You'll likely see some very modest AUR increases sort of at the same sort of levels that we're seeing now, low single-digit."
Kroger, meanwhile, noted that overall food inflation was modestly higher in the second quarter than in the first quarter. Modestly higher is still higher.
Value, Tariff Refunds and Cost Savings Do the Heavy Lifting
Here's where it gets interesting. Rather than simply passing costs along, several retailers are pouring money back into price.
Walmart, Dollar General Corporation (DG) and Kroger all said they reinvested tariff benefits into customer value. Target Corporation (TGT) kept hammering the lower-prices message, and TJX leaned on its value positioning while it managed tariff and freight costs.
Target made the point that value stays central to its strategy as consumers remain selective about discretionary spending. In September, the company slashed prices on nearly 2,000 products, building on more than 10,000 price cuts it has made over the past year.
Walmart is reinvesting tariff refunds into customer value and pricing initiatives, with the financial impact of the refunds and reinvestment expected to be largely contained within fiscal 2027. The goal is for those investments to support customer benefits and share gains beyond the current year.
Dollar General used a substantial portion of its tariff refunds to fund targeted promotions and lower everyday prices. That's a retailer taking a windfall and turning it into foot traffic.
Most Retailers Still See Growth Ahead
Despite all the cost pressure, the majority of these retailers raised their financial outlooks, reflecting expectations for continued growth. Only a few stayed cautious.
Dollar General, Ross and The Home Depot, Inc. (HD) are still opening new locations, while Williams-Sonoma expects store-count growth of 1% to 3% annually beginning in fiscal 2027.
Here's how the guidance stacks up across the group, based on their most recent earnings calls as of Oct. 1, 2026:
| Company | FY | Guidance status | Full-year sales / comparable sales outlook | Other full-year quantitative guidance |
|---|
| Walmart Inc. (WMT) | FY27 | Raised | Net sales growth 4% to 5% | Adjusted operating income growth 7% to 8.5%; adjusted EPS $2.80 to $2.87; Capex nearly 4% of annual net sales |
| Costco Wholesale Corporation (COST) | FY27 | Not Provided | Not Provided | Planned Capex of $7.5B in FY27; targeting a run rate of 30 net new warehouses annually |
| Home Depot, Inc. (HD) | FY26 | Reaffirmed | Total sales growth 2.5% to 4.5%; comparable sales 0% to 2% | Adjusted operating margin 12.8% to 13.0%; adjusted EPS growth 0% to 4%; Capex nearly 2.5% of sales |
| TJX Companies, Inc. (TJX) | FY27 | Comparable outlook maintained; Profit raised | Consolidated sales $63.4B to $63.8B; comparable sales growth 3% to 4% | Adjusted gross margin 31.2% to 31.3%; adjusted EPS $5.15 to $5.20 |
| Lowe's Companies, Inc. (LOW) | FY26 | Lowered to bottom of prior range | Sales about $92B; comparable sales approximately flat | Adjusted operating margin nearly 11.6%; adjusted EPS approximately $12.25; Capex up to $2.5B. |
| Ross Stores, Inc. (ROST) | FY26 | Raised Q3/Q4 outlook | Q3 Comparable sales growth +6% to 7%, Q4 comparable sales growth 4% to 5% | Full-year EPS $8.61 to $8.77 |
| Target Corporation (TGT) | FY26 | Raised | Net sales growth approximately 5% | Operating margin around 6.0%; EPS $9.90 to $10.90; Capex nearly $5B. |
| Kroger Company (KR) | FY26 | Sales lowered; profit reaffirmed | Comparable sales excluding fuel 0.2%–0.8%, previously 1%–2% | Adjusted FIFO operating profit $5.0B to $5.2B; EPS $5.10 to $5.30 (maintained). |
| Williams-Sonoma, Inc. (WSM) | FY26 | Raised | Total net revenue growth 4.7% to 7.2%; Comparable sales growth 4.0% to 6.5% | Adjusted operating margin 17.8% to 18.2%; Capex nearly $275M |
| Dollar General Corporation (DG) | FY26 | Raised | Net sales growth 4.0% to 4.3%; same-store sales growth 2.5% to 2.9% | EPS $7.80 to $8.00 |
| Ulta Beauty, Inc. (ULTA) | FY26 | Raised | Net sales growth 6.7% to 7.2%; comparable sales growth 3.2% to 3.7% | Operating profit growth 8.3% to 9.3%; diluted EPS $28.70 to $29.00; Capital expenditures of $400 million to $450 million |
| Best Buy Co., Inc. (BBY) | FY27 | Raised | Revenue $42.3B to $42.8B; comparable sales growth 1.9% to 3.0% | Adjusted operating income rate 4.4% to 4.5%; adjusted EPS $6.70 to $6.90; CapEx nearly $750M. |
Above is the outlook for the 12 retailers based on their most recent earnings call as of Oct. 1, 2026.
The takeaway: higher fuel, freight and supplier costs are real, and they're not going away quietly. But retailers are choosing to fight for shoppers with value, tariff refunds and operational efficiency rather than hand them the bill. For now, that math is holding up well enough that most of them still expect growth.
