For those early filers that haven't received their tax refund yet this year it may be a struggle as you may have banked on a little extra cash in your pocket for that new pair of sneakers, or frankly, to just fill your shopping cart at the grocery or drug store.
Well, you aren't the only ones: the delaying of tax returns by the Internal Revenue Service in February has taken its toll on some big name consumer and retail companies and they may not be the last.
Unilever (UL) , the maker of a range of consumer products (everything from Axe body spray to Hellmann's Mayonnaise), hinted at slowing growth in U.S. markets Thursday blaming in part delayed tax refunds. The sentiment was echoed by athletic apparel retailer Foot Locker (FL) in its guidance for fiscal first-quarter results.
Unilever reported an underlying sales decline of 0.9% in North America, compared with an underlying sales growth of 2.9%. Nestle also reported a decline in North America sales in the first quarter, although it saw slightly positive pricing.
Foot Locker, meanwhile, also said it expects first-quarter earnings to range between $1.36 and $1.39 per share, below a StreetAccount estimate of $1.47. The stock traded slightly higher in the premarket after briefly falling about 5 percent.
The delay in tax refunds stems from the "Protecting Americans from Tax Hikes (PATH) Act of 2015" passed by the Obama administration. Tax refunds under the new law could not released until Feb. 15 for those who claimed earned-income tax credit (EITC) or the additional child tax credit (ACTC).
Subdued consumer spending could have a negative impact on U.S. food titan Kraft Heinz (KHC) when it reports on May 3, as the majority its sales are derived from North America. In 2016, $18.64 billion of total sales of $26.487 billion were in the U.S. and a further $2.3 billion were derived in Canada.
Unilever CFO Graeme Pitkethly said on an analyst call that U.S. consumer spend was down throughout the quarter and noted that some political angst may have also contributed to the subdued quarter.
Meanwhile, Foot Locker CEO said the company believes "the delay in the issuance of the vast majority of income tax refund checks until after the NBA All-Star Game affected our February comparable store sales, which were down low-double digits."
Foot Locker may not be the lone retailer to feel the sting from the tax refund delays.
Said Dollar General (DG) CEO Todd Vasos on a Mar. 16 conference call, "We saw some general softness around not having those tax returns out there. We saw a pick-up as they started to flow."
Brian Sozzi contributed to this story.