Target got a tariff windfall. Now shoppers get to see how much of it makes it to the rack. This is Fashion Business Daily: price cuts, a land grab for off-price stores, and a beauty turnaround asking for a little faith. And one retailer says AI can get dead stock under control. First, Target's refund. From Modern Retail:
Tariff refunds were a massive tailwind for Target last quarter that could help it continue to lower prices. Target received $994 million in pre-tax tariff refunds during the second quarter, the company reported in its earnings release Wednesday morning. The tariff refunds boosted Target’s second-quarter operating income 9.6% year over year to about $2.6 billion.
Target reported $994 million in pre-tax tariff refunds in Q2. No need to call it massive: it lifted operating income 9.6% year over year to about $2.6 billion and added roughly 90 basis points to the full-year margin rate, bringing it to around 6%. Nine hundred ninety-four million dollars can buy plenty of red price tags. I want to know whether those tags show up in apparel, or whether grocery and home absorb the whole victory lap. CFO Jim Lee says Target will put the money into lower prices, and the company says it cut prices on more than 10,000 items over the past year. But it didn't promise direct consumer refunds or say where this next round of reductions will land. Exactly. “Value” is too roomy a word. Show me a better price on the jacket, the kids' basics, the school sneakers—not just a cheaper paper-towel pack while fashion stays full price. Here's Ivy Liu at Modern Retail:
TJX Companies plans to increase its store growth from 3% to 4%, starting next year, “to take advantage of the growth opportunities we see out there,” CEO Ernie Herrman said on the Aug. 19 earnings call. TJX currently operates 5,285 stores across 10 countries, including the U.S., Canada, Spain and the U.K.
TJX wants to move from 3% store growth to 4%, with 7,500 stores as the long-term target. Physical retail apparently didn't get the obituary memo—at least not where people can hunt for a good deal. They're lifting that ceiling from 7,000 while already operating 5,285 stores in 10 countries. CEO Ernie Herrman says openings start accelerating next year. That's a pretty specific vote of confidence in off-price. The interesting part is where they'll go. Think rural towns losing department stores, then tighter suburban clusters and smaller urban formats. If TJ Maxx and Marshalls get the good leases first, everyone else with a store rollout is fighting over leftovers. Company-reported second-quarter sales were $15.2 billion, up 5%, and TJX also received $331 million in tariff refunds. Strong numbers, sure—but a refund doesn't make the merchandising strategy work, so keep those separate. From Emily Jensen at Glossy:
On Wednesday, the Estée Lauder Companies reported a 5% sales growth for the fiscal year 2026 to $15 billion. The beauty giant attributed that uptick to the success of its “Beauty Reimagined” turnaround plan, unveiled in 2025 in reaction to declining sales. With that growth, the Tom Ford Beauty and Jo Malone London brands have now joined the billion-dollar club, according to the company.
Five percent growth to $15 billion puts Estée Lauder back in the conversation. But fragrance grew 10% while makeup managed 2%—Tom Ford is driving far more of this comeback than any glossy turnaround slogan. Company-reported, Tom Ford Beauty and Jo Malone London are now billion-dollar brands, alongside Clinique, Estée Lauder, La Mer, and MAC. That's meaningful scale, but it doesn't prove every division has recovered. Right—Bobbi Brown and Too Faced still declined, and Aveda pulled hair down 1% even with scalp care booming across prestige. The assortment isn't reimagined if shoppers are only showing up for fragrance and a few hero brands. MAC grew as the company closed a significant number of freestanding stores and expanded into Sephora U.S. That's a cleaner path to profitability than a marketing campaign. For fiscal 2027, management's 3% to 5% organic-growth guidance is the number Beauty Reimagined has to hit. From Glossy:
The children’s retailer Maisonette describes itself on its online homepage as “clothes and decor for kids and babies,” and the media has called it “ the Net-a-Porter for kids.” Now, the company is taking a big bet on a new vertical: tweens. Launching this week, Maisonette’s tween vertical is called “Neon Rebels.”
Neon Rebels is trying to solve that brutally awkward 7-to-14 wardrobe gap: the parent has the card, but the kid has veto power. More than 100 brands is a real assortment—now those LoveShackFancy pieces had better feel like something a tween chose, not a parent's Instagram mood. More than 20% of Maisonette customers now have a child over seven, so this is a retention play: its customer base is aging into it. And because it's a drop-ship marketplace with no inventory, it can test that breadth without filling a warehouse with tween dresses. Also, credit to them for skipping social ads aimed at children. Let a 7-year-old browse with parental approval, sure—but don't turn the feed into a tiny consumer-acquisition funnel. They're serving two customers at once. Millennial parents may know Maisonette from 2017; their children don't owe the company any loyalty. Inc42, with Gaurav Bagur:
Manyavar is as much a technology and data company as it is an ethnic wear brand, claimed Vedant Modi, the company’s chief revenue officer. Speaking at a fireside chat at the seventh edition of Inc42’s D2C & Retail Summit in Gurugram, Modi cited several examples of how the brand leveraged advanced data analytics and AI to scale to over ₹1,000 Cr in revenue with margins exceeding 65%.
Manyavar says it's moving inventory store by store, based on local buying patterns, and targeting 90% sell-through. If that cuts dead stock for weddingwear, that's a much more useful AI claim than a chatbot picking kurta colors. The company says it has crossed ₹1,000 crore in revenue with margins above 65%. Those are company-reported figures, and they show why allocation matters: misplaced inventory directly threatens a very profitable model. Vedant Modi can call Manyavar a technology company if he likes. But the garment still has to be right for South Delhi versus Karol Bagh; 85 crore rows of data only matter if they help the product earn the wedding invitation. Better store allocation could keep paying off—if Manyavar can show dead-stock reduction holds as the assortment and store base expand. If you're enjoying Fashion Business Daily, please subscribe or leave us a review wherever you're listening. Reviews help other people find the show and help us keep bringing you the fashion business news that matters.
Links to every story we covered are in the show notes, so check out the ones that caught your attention. Thanks for listening. We'll be back tomorrow. That's Fashion Business Daily for today. This is a Lantern Podcast.