Earlier this month, a court filing by customs officials revealed the Trump administration had paid back $100bn (£78bn) in “Liberation Day” tariff refunds to businesses.
It represented about 60% of all tariff revenue collected by the government under the policy, with significant amounts still to be repaid.
When asked how Target would use tariff refunds, chief financial officer Jim Lee did not provide details but added: “We have and will continue to invest in price.”
Last year the company slashed its expectations, which it blamed on a “high challenging environment” amid the introduction of tariffs at the time.
It has said it would aim to reduce its reliance on China for sourcing products. Target’s big sellers are mostly in non-essential goods, such as home furniture and beauty products.
It sources the majority of such products from China, with 30% of its store-label goods from the country. It was previously higher at 60% in 2017.
Target is in the middle of a turnaround plan, with the retailer saying it had cut prices on more than 10,000 items over the past year.
“While there’s still meaningful work ahead, we’re encouraged by the progress we’re making and remain focused on executing with discipline,” said chief executive Michael Fiddelke.
Separately, US cosmetics giant Estee Lauder said on Wednesday it had recorded a “$38m benefit in the cost of sales” from tariff refunds in its latest quarterly results.
“This partially offset the full-year gross impact of incremental tariffs of $102 million, which was primarily recorded in cost of sales,” the company said.
Shares of the Clinique and Bobbi Brown owner saw its share price jump about 17% after its results exceeded expectations.