In a turn of good fortune, tariff refunds are arriving for companies as they confront higher costs stemming from the war in Iran, WSJ Leadership Institute reporters Kristin Broughton and Jennifer Williams write. Here are their findings in today's newsletter:
Many companies are using the cash infusions to offset higher expenses and protect their margins-but some are going a step farther, using their refunds to woo customers and gain market share.
In a story published this morning, Kristin and Jennifer take a look at the retailers and consumer goods companies using their refunds to fund price cuts.
Lower prices aren't part of the playbook that many CFOs used to confront inflation several years ago, in the aftermath of the pandemic. But this time around, things are different. Consumers are stretched thin from years of rising costs across household budgets, particularly groceries. Add to the mix the high price of filling up a tank of gas these days, and you can start to see why some consumers are making trade-offs on how they spend their money.
Walmart CFO John David Rainey nodded to these pressures in an earnings call this month, discussing the retailer's move to cut prices on 11,000 items, funded with its $2.9 billion refund. "June was a little more obvious as we look at the quarter in terms of customers making trade-offs. And it's why we have leaned so heavily into lower prices," he said.
For more on how tariffs are impacting Canada, read on below.
The Week Ahead
Monday
The Federal Reserve Bank of Dallas releases its Texas Manufacturing Outlook Survey for August.
Tuesday
Earnings: Dell Technologies, Gitlab, Medtronic and Palo Alto Networks
The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey. The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for August.
Wednesday
Earnings: Broadcom, Brown-Forman, C3.Ai, Five Below, Hewlett Packard Enterprise, PVH and Snowflake
ADP releases its National Employment Report for August.
Thursday
Earnings: Campbell's, Ciena, Docusign, Lululemon Athletica, Planet Labs, Samsara, UiPath, Victoria's Secret and Zscaler
The ISM releases its Services Purchasing Managers' Index for August.
Friday
The BLS releases the jobs report for August.
Share this email with a friend. Forward >
Forwarded this email by a friend? Sign Up Here >
What Else I'm Watching
Impact of U.S. tariffs on Canada. The Canadian economy as a whole is projected to withstand the new tariffs of 50% on $20 billion worth of Canadian goods, or about 5% of Canada's U.S.-bound exports. But many small and medium-size Canadian business owners are expected to bear the brunt of the pain.
Social Security's looming insolvency. Congress is finally talking about saving Social Security. Those discussions on how to stave off automatic benefit cuts accelerated this summer, but concrete action remains elusive.
What Else Matters to CFOs
Aon is near an agreement to buy insurance brokerage USI Insurance from private-equity firm KKR for roughly $17 billion, including debt, according to people familiar with the matter.
A deal could be announced as soon as Monday, the people said, assuming it comes together, Lauren Thomas and Mark Maurer report in an exclusive.
The details
USI, based in Valhalla, N.Y., is an insurance brokerage and consulting firm. It helps businesses and individuals find policies and build benefit plans, among other things, and has roughly $3 billion in annual revenue, according to its website.
KKR acquired USI from the private-equity firm Onex in 2017 alongside the Canadian investment firm CDPQ for $4.3 billion. KKR has since made additional investments to increase its ownership stake in the business and become the largest shareholder.
Aon, a large insurance broker and consulting firm, has long specialized in helping businesses manage risk, healthcare benefits and retirement wealth. The acquisition would expand Aon's capabilities in helping midsize businesses and is expected to increase earnings per share as soon as 2028, a person familiar with the matter said.
📰 Other headlines
Warsh Makes the Case for Higher Rates and Raises the Bar for Standing Pat
The Sudden Unraveling of Wall Street's Momentum Trade
Can Apple's New CEO Rev Up the Steve Jobs Innovation Engine?
The World's Drinks Order Is In. Distillers Were Expecting More.
The Midwestern Burger Chain That's Going Full MAGA
High-End Credit Cardholders Find It's Harder to Get Their Money's Worth
Long-Delayed Tax Bill Comes Due for Opportunity Zone Investors
A Texas Banking Billionaire and His Children Are Locked in a Bitter Succession Drama
The Summer That Scorched French Grapes, English Gardens-and Europe's Economy
Quotable
The WSJ CFO & COO Council
The WSJ CFO & COO Council convenes the world's top financial leaders so they can gain perspective on navigating market uncertainty, aligning priorities and making decisions that deliver measurable results. Join this trusted community where CFOs and COOs exchange approaches, access strategic insights and continuously sharpen their influence across the enterprise.
Request Information.
About Us
The WSJ Leadership Institute's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Jennifer Williams and Bureau Chief Walden Siew.
You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.