Piper Sandler analyst Anna Andreeva weighs in on Footwear, Beauty, and Brands stocks amid tariff refunds.

The analyst commented: "Based on work from Don Schneider and the PSC US Policy team, with the Court of International Trade (CIT) ruling that all $166B in tariffs collected under IEEPA must be returned to importers of record (IOR) with interest, payouts will take place in tranches, with the first phase pertaining to 63% of imports (known as unliquidated or recently liquidated entries) which is about $105B, with older imports to be paid out at a later stage (with some added legal uncertainty). In this note we stack up potential refund amounts across our space (based on disclosures of what's been paid or provided as unmitigated tariff impact)-- importantly, none of our companies incorporated refunds in the '26 guides, which should help provide some cushion. On average, refunds/tariffs paid represent 16-18% of EBIT and EPS and ~2% of market cap for our coverage; we see NKE (tariffs at 36% of EPS), SHOO (35% of EPS) and VFC (32% of EPS) as the biggest beneficiaries from refunds.

How much do our names expect in refunds? Of the 4 names in our coverage that reported 1Q26, SHOO and CROX disclosed the expected refund amounts, while WRBY and RVLV are holding off until higher level of certainty is gained. Accounting treatment also varies: SHOO backed out $55M in expected refunds from GM's in a one-time charge, CROX is waiting until the cash is on hand (will also back out as one-time), while RVLV intends to allocate $'s to COGS on inventory already sold and to freight (to then be amortized) on unsold product. In Exhibit 1 below, we stack up tariff amounts our names incurred (or the expected refund amount where given); NKE and LULU have disclosed amounts paid under IEEPA, and for the remaining companies, we use the unmitigated tariff impact provided.

Refunds likely bolster balance sheet and investment flexibility rather than fund price reductions. Based on conversations with management teams, SHOO indicated that debt paydown would be #1 priority before share buybacks, and while CROX did not explicitly indicate an intended use, we would expect buybacks and re-investment at the top uses of cash. Anticipated tariff rates assumed for the balance of the year vary across our space: WRBY, CROX, and RVLV are factoring in 10% rates, while SHOO is assuming 10% through the end of July, with a step-up to 15% thereafter.

The latest we know on refund status (per PSC US Policy team). While data comes infrequently from legal filings (the last update we have is from 4/26), the first week the refund portal (known as CAPE, opened 8am on 4/20) was operational shows about 11M entries (20% out of 53M total import entries under IEEPA) have been “validated” (about $35B), while another 1.74M entries ($5.5B) have entered the refund stage--this suggests a more rapid timeline for “validating” claims than anticipated. A notice from Customs and Border Patrol (CBP) shows the first refunds could be paid by May 12th, which is more rapid than the 60-90 day timeline CBP previously estimated; peak payouts will likely take place in July and August. The Section 122 10% tariffs were ruled illegal by a lower court this week; it is unlikely the courts will settle their legality with finality before tariffs expire on July 24th. If tariffs are ultimately found to be illegal, it could trigger another round of refunds eventually (roughly $35B). For further breakdown on IEEPA refunds, please contact your PSC sales rep for the US Policy team's latest report on payment timing."