La-Z-Boy (LZB), Reliance Worldwide (RLLWF): Tariff Refunds Fail to Lift Margins

Between 29 July and 19 August 2026, Ethan Allen (ETD), Arhaus (ARHS), Reliance Worldwide (RLLWF) and La-Z-Boy (LZB) each used a quarterly earnings call to explain where the refunded 2025 import tariffs ended up. The answer was the same at all of them: the cash was absorbed within the quarter by higher fuel, freight and raw-material costs, and none of them raised full-year guidance because of it.

The refund is sized by how much a company imported in 2025

Goods entering the United States pay an import duty. IEEPA is the statute that lets a president impose tariffs under a declared emergency, and after the Supreme Court found the duties levied under it invalid, Customs began paying the money back — more than $100bn in total by the end of July 2026 [1]. Customs pays only the importer of record, so what a company collects depends entirely on how much of its 2025 cost base was bought abroad.

Inside furniture retail alone the gap is wide. Arhaus requested $37.8m [2], Ethan Allen received $5m [3], Haverty's collected $2.1m [4], and La-Z-Boy's CFO said the company's refunds were "significantly less than others in our industry" [5]. Almost all of the cash landed in a single month, June, while fuel, ocean freight and copper were all rising in the same quarter. Whether a one-off cheque becomes profit therefore depends on the size of the cost increase it lands against.

Tariff costs fell, but the margin guidance did not move

Reliance Worldwide makes plumbing fittings, and copper is its main input. On 17 August it said US tariff costs of $25m to $30m in FY2026 should fall to $5m to $7m in FY2027, a year-on-year saving of roughly $15m. Against that, the LME copper price on its own purchasing basis is set to run about $3,000 a tonne higher year on year, and the company's disclosed sensitivity is $900,000 of EBITDA per $100 of movement, which works out to about $27m in the other direction. With the two netted off, it guided FY2027 EBITDA margin to be broadly consistent with the prior year [6].

Home Depot received its refund and on 18 August reaffirmed rather than raised full-year guidance, with the CFO saying the money would be fully offset by incremental costs in fuel, energy, resin and metals, and Q4 gross margin would return to roughly flat against last year [7]. Lowe's said on 19 August that about $80m, or 30 basis points, of refund benefit was largely offset by elevated fuel and transportation costs during the quarter, and excluded any further refunds from its outlook [8]. Three companies with different categories, sizes and inputs handled guidance the same way.

What is left over goes into price and marketing, and domestic producers have none of it

The refund did not stay in profit; it went into price and demand generation. Floor & Decor had a set of price increases prepared and chose not to deploy them once it knew the refund was coming, using the money to offset inflation instead [9]. Arhaus held list prices, put about $5m into marketing and doubled its autumn catalogue circulation [2]. Lowe's said further refunds would be reinvested in customer-facing actions, and its CEO said on the same call that competitors had used tariff refunds to lower prices late in the quarter [8].

La-Z-Boy manufactures most of its upholstery in the United States, which kept its tariff bill low and now keeps its refund small as well [10]. Adjusted operating margin in its wholesale segment fell to 6.8% from 7.5% a year earlier, and that figure already includes 240 basis points of favourable tariff impact combining refunds with the company's own pricing actions; the CEO said deeper discounting had recently appeared at wholesale [5]. Bassett's SG&A ratio rose 90 basis points on higher outbound freight driven by fuel [11].

Two boundaries are worth keeping. The window runs two to three quarters: Ethan Allen said its $5m was nearly all of what it had paid [3], and Home Depot said there would be no annual lap heading into 2027 [7]. And smaller companies need not follow the same path — Culp applied about $7m of refunds to debt, cutting net debt to roughly $5m, which for a leveraged company is a permanent interest saving [12]. The test to run next is the one Lowe's supplied itself: compare each company's refund against its gross margin versus last year [8].

Companies exposed to this change

• Virco Mfg (VIRC): It kept its US factories and sells desks and chairs to schools and institutions, so importers of comparable product collect refunds in proportion to what they bring in while Virco collects nothing under the same rule, and it still carries the non-refundable 25% steel duty.
• Hamilton Beach Brands (HBB): Its small appliances are made almost entirely overseas and imported under its own entry, placing it on the receiving side of the same allocation rule; whether the cash stays depends on second-half commodity and freight costs.
• Lifetime Brands (LCUT): Kitchenware and tableware are likewise import-sourced, and with full-year net sales guidance of only $650m to $700m, a refund is far larger relative to its size than at a big-box retailer.

Sources

[1] Yahoo Finance · US tariff refund totals · 2026-08-12 · news · https://finance.yahoo.com/markets/article/us-sent-back-334-billion-in-tariff-refunds-in-july-as-total-payouts-surpass-100-billion-190357854.html

[2] Drillr · Arhaus (ARHS) · 2026-08-06 · FY2026 Q2 earnings call

[3] Drillr · Ethan Allen (ETD) · 2026-07-29 · FY2026 Q4 earnings call

[4] Drillr · Haverty's (HVT) · 2026-08-04 · FY2026 Q2 earnings call

[5] Drillr · La-Z-Boy (LZB) · 2026-08-19 · FY2027 Q1 earnings call

And it positions us well. in that tariffs are relatively a small factor to us. But to your point, then tariff refunds are a small factor to us as well. That said, it's a model we've worked with for a long time, and we believe in it.

[6] Drillr · Reliance Worldwide (RLLWF) · 2026-08-17 · FY2026 results call

[7] Drillr · The Home Depot (HD) · 2026-08-18 · FY2027 Q2 earnings call

[8] Drillr · Lowe's (LOW) · 2026-08-19 · FY2027 Q2 earnings call

[9] Drillr · Floor & Decor (FND) · 2026-07-30 · FY2026 Q2 earnings call

[10] Drillr · La-Z-Boy (LZB) · 2026-06-17 · FY2026 Q4 earnings call

[11] Drillr · Bassett Furniture (BSET) · 2026-07-02 · FY2026 Q2 earnings call

[12] Drillr · Culp (CULP) · 2026-07-02 · FY2026 Q4 earnings call

This is only here to surface industry changes and companies that may be overlooked - it is not a stock recommendation.