With all eyes on the Supreme Court ahead of its potential tariff ruling, the situation remains an “overhang” for much of 2026.

That’s the conclusion from BTIG retail analyst Janine Stichter.

Following the first day of the ICR Conference in Orlando, Fla., on Monday, Stichter said the general consensus of the retailers and shoe brands that gave presentations was that the tariff overhang will see “impacts often greater than what was felt on the P&L (profit and loss statement) in 2025.”

Because ticket prices have generally held with less consumer resistance than expected, representing opportunity for the retailers and shoe firms if tariffs are reversed.

“Most companies found it too early to postulate what would happen if tariffs were reversed, but cited potential for gross margins to end up higher than pre-tariff levels given price increases,” she noted. She added that tariffs have also resulted in “significant sourcing efficiencies for many companies.”

Stichter said benefits from stimulus and higher tax refunds also came up frequently in conversation, noting that most companies believe that consumers will spend the money instead of putting it into savings.

Jefferies retail analyst Randal J. Konik said that without a Supreme Court ruling on tariffs, this means that for consumer discretionary companies they will see “continued margin pressure for those with high import exposure, while firms with diversified supply chains and effective mitigation strategies remain best positioned.”

Konik said effective mitigation includes inventory discipline, flexible sourcing and geographic diversification as the best defenses against policy margin volatility.

The analyst also said investors should prioritize firms with proven mitigation strategies, such as diversified supply chains. And those firms that are actively managing inventory and margins are “best positioned” to weather ongoing policy uncertainty.

Moreover, companies with no import exposure or those sourcing outside of tariff-impacted regions should be favored, while companies relying solely on pricing power or with concentrated supply chains and high U.S. sales mix should be avoided.

U.S. President Donald Trump in April 2025 unleashed a reciprocal tariff policy that spelled big trouble for shoe brands, especially those manufacturing in China and Vietnam, although few countries were spared.

The U.S. Supreme Court is expected to rule this month on the fate of the reciprocal duties levied under the International Emergency Economic Powers Act (IEEPA). The ruling could come as early as Wednesday, when the next set of decisions are disclosed on cases heard on an expedited basis. Trump said the policy was about rebalancing trade with our partners. It was also his way to shrink the deficit as he also pushed for the renegotiation of bilateral trade deals under the framework of national security. The framework for new trade deals are in place, but most still need certain details to be hammered out.

But even if the ruling comes down soon, it will only address whether the trade policy Trump’s administration implemented is legal or not. And if not, it will be the Court of Appeals for the Federal Circuit that will make determinations regarding refunds, such as who would get it. That’s a separate process that could take several more months for resolution.

Moreover, former Commerce Secretary Wilbur Ross who held the office during Trump’s first term as president, told Footwear News there are complexities involved such as who gets the refund as importers pass costs to their customer and then the retailers pass those costs to the consumer. He also said it would be “weird” for the court to knock out a bilateral agreement the U.S. made with another country, which would have its owns set of trade and tarif ramifications.

Then there’s the question of where the refunds will come from and how soon they must be issued. That’s another big question mark as Customs and Border Protection in December began liquidating the IEEPA duties it collected earlier in 2025.

Meanwhile, a 2025 fourth quarter survey of shoe executives by the Footwear Distributors and Retailers of America (FDRA) indicate the expectation of higher landed costs for imports and other impact from tariff-related pressures are key concerns for the footwear sector entering 2026.