sales, in particular sneakers, could see a bounce due to higher tax refunds that are issued starting in February.
The tax refunds will be larger than typical this year due to U.S. President Donald Trump’s One Big Beautiful Bill Act’s tax cuts for 2025. According to the Tax Foundation, individual income taxes for 2025 were cut, but the IRS didn’t adjust withholding tables after the law passed. That resulted in most workers continuing to withhold more taxes from their paychecks than required by the tax cuts. The Tax Foundation estimated that the tax changes will result in an average tax cut of $611. It noted that a private sector analysis indicates that the new law could see average refunds up between $300 to $1,000.
Citing to the Tax Foundation’s estimate of an average refund increase of 25 percent to 35 percent, or from $3,052 last year to $4,000 this year, Needham’s Tom Nikic noted that with “sneakerheads potentially having a windfall in February, it could help sell-through rates during this key month.”
That would be a big plus for sneaker sales following January’s slow period. Moreover, the Needham analyst noted that “there is a very crowded launch calendar for February, with 33 potential high-heat launches, up from 22 a year ago.” He said the industry usually sees a pickup in activity in February, particularly around the time of the NBA All-Star Weekend, which will be Feb. 13-15 this year. And the analyst said he’s seeing more of the “high-quality launches” flowing through the wholesale channel.
Most major releases for February are condensed around the NBA All-Star Game, with Jordan Brand leading the charge through multi-sneaker collaborations with Levi’s on the Air Jordan 3, and Union and Fragment on the Air Jordan 1. It will also drop the Air Jordan 6 “Salesman” steeped in a once-niche backstory, as well as a more limited and premium version of the same model to relaunch the “Bin23” collection.
Nike proper will hit both performance and lifestyle through several LA-themed sneakers, a “Warning Label” collection featuring its signature basketball models and more. Adidas, meanwhile, is still keeping its cards close to the chest and has yet to reveal its higher-profile drops for the basketball spectacle, but it did just launch a Bob Marley collection in conjunction with the Jamaica Football Federation and a more affordable version of Pharrell’s coveted Jellyfish model.
Meanwhile, fashion and dress footwear sales could also see some pickup.
BTIG’s Janine Stichter also noted that higher tax refunds could be a “potential incremental tailwind” for some consumers. Moreover, 70 percent of consumers indicated that if they were to receive a $2,000 tariff rebate check as Trump has proposed, they would spend a portion of it, with apparel at 52 percent and footwear at 40 percent ranked as the top two spending categories.
RRD’s retail and consumer behavior expert Chip West said that larger refunds for shoppers could make this tax season one of the biggest in recent history, one that could give “Q1 sales [at retail] a boost when the industry usually expects a post-holiday slump.” He said retailers have a strong opportunity to ramp-up impactful promotional campaigns to “motivate deal-seeking consumers before, during and after they receive their refunds.”
West said 86 percent of all refunds were issued last year in February, March and April. “Retailers that solidify offline and online media strategies that connect with high-intent tax refund spenders, especially in these months, will win,” he said.
With contributions from Ian Servantes
