Profits Rise Across Major Companies
America’s largest companies are reporting stronger sales, earnings, and expectations for the rest of 2026. Businesses ranging from Target and J.M. Smucker to Deere have raised their financial outlooks. Across the S&P 500, second-quarter earnings per share increased 53% from the previous year. Sales rose almost 16%, according to LSEG data. Investment gains at Amazon and Alphabet contributed to the surge, but results remained historically strong even without them.
Several forces are supporting the expansion at the same time. Artificial-intelligence investment, federal spending, a strong stock market, and high home values are helping companies and consumers. Nearly twice as many businesses increased current-quarter profit guidance as lowered it. This marks a reversal from the previous year, when reduced forecasts were more common. Executives generally expect favorable conditions to continue in the near term.
Tariff Refunds Strengthen Results
Refunds of earlier tariff payments have provided companies with a large but temporary financial benefit. Apollo Global Management estimated that refunds could contribute more than 4% of third-quarter economic growth. They could add about 0.2 percentage point to the Atlanta Federal Reserve’s growth projection. Many businesses kept most of this money as profit rather than passing it to customers through lower prices.
At Abercrombie & Fitch, steady demand and approximately $120 million in expected refunds supported a higher annual forecast. Garmin received $21 million, improving margins alongside strong fitness-product sales. Healthcare businesses McKesson and Charles River Laboratories International also raised their outlooks. Smucker joined the diverse group of companies benefiting from improved performance and refunded tariff costs.
Consumers Remain Cautious but Active
Retailers reported continued purchases of appliances, toys, clothing, food, beauty products, and electronics. Dollar General recorded its fifth consecutive quarter of higher customer traffic and a 3.5% comparable-sales increase. Best Buy benefited from demand for computers, televisions, and artificial-intelligence glasses. Target also posted gains, although broader indicators showed softer July retail sales and weaker August consumer confidence.
Still, results were uneven across the sector. Gap reported lower quarterly sales because of weakness at Old Navy and Athleta, yet it increased its annual earnings estimate. Walmart’s comparable sales grew at their slowest rate in more than six years. However, the retailer still raised its forecast and used part of its $2.9 billion tariff refund to reduce prices. Economists expect spending to remain healthy while artificial-intelligence investment, market values, and consumer income continue supporting growth.
References
Nassauer, S., & Francis, T. (2026, August 31). Corporate America’s profits are booming—and signal more good times ahead. The Wall Street Journal. https://www.wsj.com/business/earnings/corporate-profit-america-44836dc6