By Katherine Hamilton

Big-box retailers set to report earnings this week are incurring higher costs from tariffs and bracing for slower spending as broader economic uncertainty has weighed on consumer sentiment.

Analysts are expecting more pressure on margins at retailers such as Dick's Sporting Goods, Kohl's, Macy's and Burlington Stores, as the Asian countries that manufacture much of the apparel sold in the U.S. are hit with higher trade duties. Costs could get even higher after July, when the 90-day pause on reciprocal tariffs is scheduled to end. Retailers are wrestling between tacking the cost of tariffs onto sticker prices and not scaring away consumers, who have been pulling back on some discretionary spending as economic uncertainty persists.

Dick's Sporting Goods

Dick's reports first-quarter earnings Wednesday and expects higher numbers than analysts were projecting, with sales set to be around $3.16 billion, ahead of Wall Street's $3.12 billion estimate. Truist analyst Joseph Civello estimates Dick's can offset most tariff headwinds by modestly increasing prices since it has a fairly affluent and loyal customer base. But shares of the sporting-goods retailer took a beating in mid-May after it said it plans to acquire Foot Locker for $2.4 billion, as investors are worried the struggling shoe store won't add much value. Some analysts believe the deal will expand Dick's addressable market and that the stock's slide may be overblown. The deal isn't set to close until the second half of the year.

Kohl's

Kohl's, which reports Thursday, was already expecting lower sales when drama in its c-suite broke out in May. The department store fired its chief executive three months into his tenure after a probe found he was directing business to a romantic partner. Kohl's is now searching for its fourth CEO in three years, all while trying to regain sales from categories it previously cut back on, such as fine jewelry and petite clothing. After its fiscal fourth quarter in March, Kohl's had said it anticipated this year's sales would fall 5% to 7%. Analysts polled by FactSet are expecting $3.02 billion in the first quarter, down from $3.18 billion the year before.

Macy's

Macy's, which reports Wednesday, is expecting sales to fall this year as even its affluent customers are letting uncertainty seep into their shopping habits. The department store said in March it expected annual same-store sales to decline, despite analysts projecting a small gain, and executives said shoppers at all income levels appeared to be affected by economic turbulence. Wall Street estimates Macy's will record $4.42 billion in first-quarter sales, down from $4.85 billion the prior year.

Burlington Stores

So far, off-price retailers aren't looking particularly resilient to tariffs, despite some analysts' expectations that consumers would trade down for cheaper goods. Burlington's competitors gave cloudy outlooks this month, sending their stocks tumbling. TJX, which owns T.J. Maxx and Marshalls, said new tariffs would lead to lower-than-expected earnings in the second quarter, while Ross Stores withdrew its full-year guidance because of tariff uncertainty. Analysts polled by FactSet are projecting Burlington to report $2.53 billion in first-quarter revenue on Thursday, up from the $2.36 billion it logged the year before.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

May 27, 2025 11:47 ET (15:47 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.