Osprey brand owner says high supply chain costs are outpacing IEEPA tariff refunds

Dive Brief:

• Helen of Troy has begun collecting refunds for tariffs invalidated by the Supreme Court earlier this year, but unclear payment cadence and higher commodity costs are complicating the benefits to its bottom line, executives said during a Q1 2027 earnings call this month.
• The parent of brands such as Hydro Flask, Osprey and Drybar expects refunds totaling $9.2 million for entries covered by the first phase of Customs and Border Protection’s efforts to return funds paid for levies enacted under the International Emergency Economic Powers Act. Thus far, the company has secured $1.8 million of those reimbursements.
• However, increased spending to avoid supply disruption, higher commodity prices, unfavorable currency fluctuations and spiking freight costs are offsetting the initial benefits from the refunds, according to CFO Brian Grass.

Dive Insight:

Refunds for President Donald Trump’s IEEPA tariffs have been flowing ever since CBP launched its dedicated portal, known as Consolidated Administration and Processing of Entries, or CAPE. Companies including Nike, McCormick & Co., Ford Motor Co. and BJ’s Wholesale Club have publicly reported their returns.

However, the payment of refunds has not been immediate for every entry, particularly as CBP continues to develop new capabilities to handle returning the $166 billion importers paid in IEEPA tariffs before the Supreme Court struck them down. The agency launched phase two of the refund rollout at the end of last month, covering shipments awaiting reconciliation of their final duty calculations. Phase three, which would cover finally liquidated entries, could go live by the end of this month, pending an appeal by the Department of Justice.

Helen of Troy said $71 million of the IEEPA tariffs it paid were not covered during phase one of CAPE and that it is preparing to submit for additional entries now that phase two is available. During the quarter, the company endured a 110 basis-point decrease in gross profit margin, due in part to the unfavorable impact of tariffs.

The company plans to invest much of the reimbursements back into its business, including by increasing capital expenditures on product development and commercial initiatives, according to Grass.

Helen of Troy also expects to use tariff refunds to mitigate inflationary pressure on its supply chain, mirroring similar headwinds faced by manufacturers in other industries, such as Ford and McCormick.

Grass said the strain began building before the Iran war, but geopolitical and supply chain disruptions have exacerbated the impact. Thus far, cost inflation has outstripped the benefit of tariff refunds the company has secured, but the dynamic would flip if Helen of Troy receives its full reimbursement.

Planning investments and projecting potential economic benefits is difficult given the unclear timing of tariff refund payments, according to Grass.

“There is a general rule that within 90 days, you should get claims approved,” Grass said. “It doesn’t totally follow; there doesn’t appear to us that there’s a pattern that we can reliably depend on.”