Major American corporations are warning investors that President Donald Trump’s tariffs are raising prices, forcing companies to scale back business plans, and placing growing pressure on lower-income consumers while wealthier households continue to spend.
Fourth quarter earnings calls from companies including Walmart, McDonald’s, Target, Burlington, BJ’s Wholesale Club, Columbia Sportswear, Home Depot, and Lowe’s show a consistent theme. Executives say tariffs and economic uncertainty are raising costs, reshaping consumer behavior, and widening the gap between affluent shoppers and working families.
“We continue to evaluate and have taken actions to mitigate the financial impact of tariffs through a combination of price increases, vendor negotiations, resourcing production, and other tactics,” Columbia Sportswear CEO Tim Boyle told investors. “For both Spring 2026 and Fall 2026, we increased U.S. pricing by a high single-digit percent. When combined with our other mitigation tactics, our goal in 2026 is to offset the dollar impact of higher tariffs.”
Retail executives say tariffs on imported goods have forced companies to adjust pricing across multiple categories as businesses attempt to manage higher supply costs.
“We’ve worked hard to mitigate grocery inflation. As tariff-related costs lifted prices across many categories,” Walmart Chief Financial Officer John David Rainey said.
Corporate leaders also described consumer spending patterns that reflect an increasingly divided economy. Executives say wealthier households continue to make purchases while lower-income consumers are becoming more cautious.
“Throughout the year, we navigated a dynamic environment marked by a more cautious, value-seeking consumer, tariff-related and geopolitical uncertainties, and broader macroeconomic volatility,” BJ’s Wholesale Club CEO Robert W. Eddy said during the company’s earnings call.
Walmart executives reported that much of the company’s growth is now coming from higher-income households.
“This quarter, the majority of our share gains came from households making more than $100,000. For households earning below $50,000, we continue to see that wallets are stretched. And in some cases, people are managing spending paycheck to paycheck,” Walmart CEO John Furner said.
McDonald’s reported similar trends among its customers.
“We’ve seen traffic hold up pretty well with upper income consumers and traffic has been pressured with lower income consumers,” McDonald’s CEO Christopher Kempczinski said. “And of course, lower income consumers are more value and affordability sensitive…But certainly, the expectation for the balance of ‘26 is that, that low-income consumer is going to continue to be under pressure.”
Tariffs have also forced retailers to abandon expansion plans in some product categories, according to executives.
“Last year we started out with ambitious sales plans in our home businesses, but we had to shelve those plans in response to tariffs,” Burlington CEO Michael O’Sullivan said.
BJ’s executives reported similar challenges in areas tied closely to imported goods.
“We had a tougher quarter in our home and seasonal businesses. Those were more subject to tariffs,” Eddy stated. “That is where much of our inventory cuts happened, and those two businesses had negative comps.”
Retailers say uncertainty surrounding trade policy continues to complicate planning for the year ahead.
“A lot of variables moving on the tariff front, obviously. I think that, you know, that we step into 2026 with those variables moving. We stepped into 2025 with some of those variables certainly moving,” Target CEO Michael Fiddelke told investors.
BJ’s Executive Vice President Laura L. Felice said the tariffs could continue affecting consumer demand and inflation this year.
“Tariffs may shape the trajectory of inflation and broader consumer demand, and ultimately influence our results this year,” Felice said.
Home Improvement, Technology Sectors Take a Hit
Executives in the home improvement sector say uncertainty in the broader economy is also freezing activity in the housing market.
“Housing turnover has remained at historical lows since 2023, which has significantly reduced demand for projects and other purchases associated with buying and selling a home,” Home Depot Chief Financial Officer Richard McPhail said. “Our customers also tell us they have concerns over general economic uncertainty, including inflation, growing job concerns, and higher financing costs.”
Lowe’s CEO Marvin Ellison told investors the housing market remains constrained as inflation and borrowing costs weigh on consumers.
“Consumer confidence remains subdued given inflationary pressures and overall economic uncertainty… a persistent lock-in effect remains in place keeping housing turnover and new home starts under pressure, leading us to expect improvement in both the housing and home improvement markets to be gradual,” Ellison said.
Economic data released alongside the earnings reports also points to slower growth. The Commerce Department’s Bureau of Economic Analysis reported that gross domestic product increased at an annualized rate of 1.4% in the fourth quarter, far below economists’ expectations of roughly 3%.
The slowdown follows stronger growth earlier in the year. The economy expanded at a 4.4 % pace in the third quarter and grew 2.2% overall last year, the slowest rate in five years.
Federal government spending dropped at a 16.6% rate during the quarter, the steepest decline since 1972. The reduction cut more than one percentage point from overall GDP growth.
Labor market data also shows new concerns. The February employment report showed job losses of 92,000, while earlier numbers for December were revised downward to show a loss of 17,000 jobs.
Researchers also say artificial intelligence is becoming a growing factor in layoffs across the technology sector.
The financial research platform RationalFX compiled data from U.S. WARN notices, TrueUp, TechCrunch, and the Layoffs.fyi tracker and found that roughly 9,238 layoffs worldwide this year have been tied to artificial intelligence implementation and corporate restructuring. That figure represents about 20% of the 45,363 technology layoffs recorded globally since the start of 2026.
Among the companies announcing the largest job cuts tied to automation are Block with 4,000 layoffs, WiseTech Global with 2,000, Livspace with 1,000, eBay with 800, Pinterest with 675, ANGI Homeservices with 350, Oracle with 254, and MercadoLibre with 119.
Analysts say businesses are restructuring around automation and machine learning tools that can perform tasks once handled by large teams of employees.
“Even as companies post record revenues in 2026, the tech sector continues to be fundamentally reshaped by AI,” RationalFX analyst Alan Cohen said in an email. “Firms such as Block and Amazon have explicitly tied workforce reductions to AI and automation as they reorganise around more efficient, technology-driven workflows. If these waves of layoffs continue at the current pace, economists warn they could place sustained upward pressure on unemployment across the sector and beyond as AI adoption accelerates.”