TGT

Walmart and Target are among the retailers that should be capable of finding their niche in an ever-shifting consumer landscape.

Costco cleared sales estimates Thursday while retailers warn that higher fuel prices and inflation pressures could hit consumer spending.

Walmart (NASDAQ: WMT) stock has dropped 11% over the past five trading days. This downturn comes right on the heels of the company's recent Q1 2027 earnings release, where, despite strong e-commerce growth and beating revenue forecasts, the stock faced immediate pressure. It is a pullback that should make investors take notice. When a reliable stock takes a short-term hit following an earnings report, the instinct is to fret over the immediate downside. Is that the right move? Not if you are focused on building a resilient portfolio. The real question to ask is simple: Does this stock actually help diversify your money? Let's look past the daily market noise and examine how Walmart behaves relative to major asset classes over the long haul. Photo by Alexas_Fotos on Pixabay True diversification means owning assets that do not move in perfect harmony with the rest of the market. On this front, Walmart offers a unique setup. Over the last five years, Walmart has maintained a modest 34.3% correlation with the S&P 500. It shares some general directional trends with the broader market, but it still offers distinct, idiosyncratic behavior useful for satellite allocations. A diversifying asset is only helpful if it actually offers decent returns. To judge this, investors look at upside capture. This metric tracks how much of the market's gains a stock pockets when the indexes are roaring. Walmart currently holds a low upside capture ratio of 8.5, which tells us it tends to lag behind during powerful bull markets. Because it does not chase the market aggressively upward, its true value rests on acting as a steady, non-correlated shock absorber when things get bumpy. Investors looking to see how it holds up during market corrections can explore Stress Testing WMT: Historical Drawdowns and Macro Risks. An uncorrelated stock is still a bad investment if the underlying company is falling apart. So, how is the actual business holding up? Here is a quick look at WMT's fundamental health. While we compare it against the S&P 500 median, it further helps to understand WMT's standing against direct peers. Walmart is built for steady stability rather than explosive growth, but investors are completely fine paying a premium for that peace of mind. Just look at the numbers. Its price-to-earnings ratio sits at a hefty 44.4 compared to the S&P 500 median of 23.5, proving folks will...

Within roughly 24 hours of each other last week, two of the biggest names in American retail opened their books -- and both gave investors plenty to chew on. Big-box retailer Target Corporation (NYSE: TGT) returned to sales growth after a long slump, while Walmart (NASDAQ: WMT) once again saw robust growth across its business. It was also the first full quarter under new leadership at each company, with Michael Fiddelke at Target and John Furner at Walmart both having stepped into the CEO role on Feb. 1. Yet investors didn't exactly celebrate. Both stocks slipped on their reports, a reminder that strong numbers don't always translate into immediate gains -- especially after a run-up. So with both retailers fresh off earnings, which one looks like the better stock to buy today? For the first time in over a year, Target's business is moving in the right direction. The big-box retailer's first-quarter comparable sales -- a measure of sales at stores and digital channels open at least a year -- rose 5.6%, ending four straight quarters of declines. Total net sales climbed 6.7% to $25.4 billion, and customer traffic grew 4.4%, suggesting more shoppers, not just higher prices, drove the gain. Encouragingly, Target's strength was broad. Comparable digital sales rose 8.9%, led by more than 27% growth in same-day delivery tied to the company's Target Circle 360 membership. And Target's non-merchandise sales -- which include its Roundel advertising arm, membership fees, and the Target+ online marketplace -- jumped nearly 25%. Those are exactly the higher-margin revenue streams the retailer needs as it works to rebuild profits. The earnings line looked messier at first glance, but only because of a one-time item. A year earlier, Target had booked gains from legal settlements that inflated its reported profit, which made this quarter's results look like a decline. Strip those gains out, and non-GAAP (adjusted) earnings per share actually rose 32% to $1.71. Buoyed by the quarter's robust results, management roughly doubled its full-year net sales growth target to around 4%. Still, one good quarter doesn't undo a year of struggles. Target management struck a measured tone, telling investors during the company's earnings call that it is keeping "a cautious outlook" given the work ahead and ongoing macroeconomic uncertainty. Target's recovery may be showing progress, but it'...

Target’s first quarter results surpassed Wall Street’s revenue and profit expectations, yet the market responded negatively. Management credited broad-based sales growth to new merchandising strategies, with CEO Michael Fiddelke emphasizing, “Top line growth was broad-based with growth across both stores and digital channels led by traffic.” The introduction of new leadership roles and a focus on core customer segments, such as busy families, were highlighted as pivotal. Chief Merchandising Officer Cara Sylvester noted that early signs of progress were driven by updated assortments and partnerships, but acknowledged that most of the transformation remains ahead. Is now the time to buy TGT? Find out in our full research report (it’s free). Revenue: $25.44 billion vs analyst estimates of $24.6 billion (6.7% year-on-year growth, 3.4% beat) Adjusted EPS: $1.71 vs analyst estimates of $1.46 (17.3% beat) Adjusted EBITDA: $1.82 billion vs analyst estimates of $1.75 billion (7.2% margin, 4.3% beat) Operating Margin: 4.5%, down from 6.2% in the same quarter last year Locations: 2,002 at quarter end, up from 1,981 in the same quarter last year Same-Store Sales rose 5.6% year on year (-3.8% in the same quarter last year) Market Capitalization: $56.97 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Corey Tarlowe (Jefferies) asked about the sustainability of organizational changes and SG&A control. CEO Michael Fiddelke emphasized that growth remains the goal, pointing to early guest response to merchandising and experience updates, while Sylvester detailed the focus on value and assortment updates for busy families. Spencer Hanus (Wolfe Research) questioned reinvestment of comp upside and the impact of shelf resets. COO Lisa Roath explained that payroll and store investments are being targeted to elevate the guest experience, with store metrics showing improvement and ongoing investments aligned with strategy. Katharine McShane (Goldman Sachs) inquired about improvements in inventory availability. Roath noted that in-stock rates have improved, especially in high-turn categories like food and essentials, due to investment...

It's been a challenging year for retailers. Inflation, geopolitical conflicts, and tariffs drove up costs, while the same macro headwinds curbed consumer demand for new products. However, not all retailers sank with the broader sector. Let's review the winners and losers from this earnings season, and where those stocks might head over the next year. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » Target's (NYSE: TGT) first-quarter earnings report impressed investors as its comparable sales finally grew again after a year-long slowdown. It expects net sales to grow 4% for the full year, compared with its prior outlook of 2% growth and its 2% decline in fiscal 2025 (which ended this February). That recovery was driven by its new CEO's "Back to Basics" strategy of reorganizing its stores, stabilizing its inventory, and improving its employee training. It also expanded its food and beverage categories while selling more essential items to reduce its dependence on pricier discretionary items like home decor and electronics. It slashed prices to keep up with competitors, expanded its Target 360 program to lock in more shoppers, and secured additional exclusive brand partnerships to differentiate itself from other retailers. Wall Street now expects Target's revenue and EPS to grow 4% and 1%, respectively, this year. Its stock still looks cheap at 15 times this year's earnings, and it pays a forward yield of 3.6%. Kohl's (NYSE: KSS) latest report for the fourth quarter of 2025 was much worse. Its comps fell 3.1% for the full year, and it expects another 0%-2% decline for 2026. Unlike Target, which is leveraging its scale to stay competitive, Kohl's is still struggling to stay afloat in the crowded retail market. In this challenging macro environment, Kohl's is losing its core lower- to middle-income shoppers to superstores like Walmart and Target, off-price retailers like TJX, dollar stores, and e-commerce giants like Amazon. As its growth stalled out, it focused more on cutting costs than on organizing its cluttered stores, simplifying its complex promotions, and expanding its e-commerce platform. For 2026, analysts expect its revenue to grow less than 1% as its EPS plunges 38%. Its stock might...

As Costco Wholesale Corporation COST prepares to unveil its third-quarter fiscal 2026 earnings results on May 28, after the market closes, investors face an important decision: Should they buy, hold or sell the stock? With expectations and market conditions in focus, it is crucial to evaluate the key factors influencing Costco’s performance and whether the stock offers an attractive entry point.Costco's strategic investments, customer-centric approach, merchandise initiatives and focus on membership growth have supported steady sales and earnings growth, positioning COST as a consumer defensive stock.Analysts are optimistic about Costco's upcoming earnings. The Zacks Consensus Estimate for third-quarter revenues stands at $69.50 billion, calling for a 10% increase from the prior-year reported figure. On the earnings front, the consensus estimate has improved by 3 cents to $4.91 per share over the past 30 days, implying a 14.7% year-over-year jump.Costco has a trailing four-quarter earnings surprise of 1.1%, on average. In the last reported quarter, this Issaquah, WA-based company beat the Zacks Consensus Estimate by a margin of 0.7%. Image Source: Zacks Investment Research As investors prepare for Costco's third-quarter announcement, the question looms regarding earnings beat or miss. Our proven model predicts that an earnings beat is likely for Costco this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.Costco has an Earnings ESP of +1.95% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Costco Wholesale Corporation price-consensus-eps-surprise-chart | Costco Wholesale Corporation Quote Costco’s third-quarter performance is likely to have benefited from continued momentum in membership growth, strong renewal trends and steady traffic gains across regions. Management highlighted that members remain focused on value and quality, which continues to support shopping frequency and basket expansion even in a cautious consumer environment. Costco also continued to benefit from growth in executive memberships and member upgrades, supported by added member benefits and retention initiatives. The Zacks Co...

Walmart Inc. WMT shares plunged 8.1% after the retail giant released first-quarter fiscal 2027 results, even though the company delivered healthy sales growth and reiterated its full-year guidance. The sharp sell-off reflected investor concerns over profitability pressures and a cautious consumer environment rather than weakness in Walmart’s core operations.Over the past three months, Walmart has declined 6.2%, which is in line with the industry’s performance. However, the retail giant has underperformed the broader Zacks Retail – Wholesale sector as well as the S&P 500’s respective gains of 4.3% and 9.2% in the same time frame. Image Source: Zacks Investment Research Meanwhile, other retailers like Target Corporation TGT and Costco Wholesale Corporation COST have risen 10.4% and 1.7%, respectively, whereas The Kroger Co. KR has dipped 1.5%. Walmart’s post-earnings drop was mainly related to profitability concerns. The company delivered strong first-quarter fiscal 2027 sales, with total revenues rising 7.3% year over year to $177.8 billion. However, the adjusted operating income (on a constant currency or cc basis) increased only 5.1% to $7.5 billion, showing that higher costs limited margin expansion.Fuel costs were a major pressure point. Walmart absorbed about $175 million in higher-than-planned fuel expenses across its distribution and fulfillment operations, which hurt operating income growth by roughly 250 basis points. This seems to have weighed on investor sentiment despite the company’s solid sales performance.Operating, selling, general and administrative expenses increased 8.9% to nearly $37.2 billion. Higher depreciation costs from investments in automation, technology and fulfillment, along with increased healthcare expenses from associate enrollment and medical cost inflation, added to the pressure. Investors were also cautious about consumer spending. Walmart noted that lower-income shoppers remain budget-conscious amid elevated fuel prices and inflation. This combination of slower profit growth, cost inflation and cautious consumer signals overshadowed Walmart’s strong sales trends, triggering the sharp pullback in WMT shares. Despite near-term concerns, Walmart’s long-term growth story remains firmly intact. The company continues to gain market share across income groups, supported by its strong value positioning and expanding omnichannel ca...

Interested in Target Corporation? Here are five stocks we like better. Walmart, Home Depot, and other retailers say consumers remain active but increasingly price-sensitive. Buy-Now-Pay-Later delinquencies are rising sharply, signaling growing financial stress among lower-income consumers. Investors may need a more selective approach toward retail and consumer-facing stocks in a bifurcated economy. The stock market and the economy are not the same thing, but in 2026, they share one trait: skepticism. Despite blockbuster earnings reports from companies like NVIDIA (NYSE: NVDA), Palantir Technologies (NASDAQ: PLTR), and Alphabet (NASDAQ: GOOGL), this may be the most reluctant bull market in history. That doesn’t mean investors are leaving the market, but the concentration of market winners is still not broadly expanding to other sectors. The recent retail earnings reports aren’t going to change that. On the surface, the consumer looks resilient. The retail sales data continues to at least meet, if not exceed, expectations. However, all may not be as it seems. Retail giants like Walmart Inc. (NASDAQ: WMT), Home Depot (NYSE: HD) and TJX Companies (NYSE: TJX) have been telling a cautious story. → Voya Financial Grows Earnings Across All 3 Business Segments Consumers are still spending, but with real intentionality. And since investors are also consumers, it may be getting harder to separate the two. The investor deciding whether to add a retail stock to their portfolio and the shopper deciding whether to remodel their kitchen are, increasingly, the same person making the same calculation: is now the right time to commit? The word "choiceful" has become part of the retail lexicon. Walmart used it explicitly on its Q1 earnings call to describe a customer who is still showing up but making sharper trade-offs at every price point. Management also pointed to consumers shifting toward private-label brands, even among higher-income consumers. → SpaceX Gets the Attention, But These 4 Stocks Could Get the Returns Home Depot offered one of the more telling data points of the earnings season: same-store sales growth remained modest, with customers completing smaller repair and maintenance projects while continuing to defer large remodels. Lowe's (NYSE: LOW) also spoke of a consumer who is engaged but not confident. Both stocks have held up reasonably well because repair-and...

Interested in Walmart Inc.? Here are five stocks we like better. Despite all three posting solid results, TJX Companies rose 5.6% after earnings, while Walmart fell 7.3% and Target dropped 3.9%. Walmart maintained its fiscal 2027 outlook after a roughly 25% six-month rally, giving investors little reason to push shares higher. TJX raised full-year sales and EPS growth guidance and increased its share buyback spending plans by $250 million, to as much as $3 billion. Retail earnings season delivered a clear reminder that good results are not always enough. Walmart (NASDAQ: WMT), Target (NYSE: TGT) and TJX Companies (NYSE: TJX) all posted solid quarterly numbers recently, but investors reacted to the reports very differently. → Voya Financial Grows Earnings Across All 3 Business Segments For Walmart and Target, strong sales growth was overshadowed by already-elevated expectations and lingering guidance concerns. For TJX, a cleaner setup, stronger outlook and larger buyback plan gave the market a reason to reward the stock. Arguably, the biggest disappointment from the latest round of retail store earnings reports was Walmart. Overall, WMT stock dropped 7.3% after it released earnings on May 21. → SpaceX Gets the Attention, But These 4 Stocks Could Get the Returns But the problem wasn’t that Walmart's business wasn't performing well—it most certainly was. The company saw revenues grow by over 7% year-over-year (YOY), or 5.9% on a constant currency basis, to $177.75 billion. This marked Walmart's fastest revenue growth since calendar Q1 2023. Adjusted earnings per share (EPS) also rose solidly by 8% YOY. Both figures slightly beat Wall Street estimates. But investors wanted more than a solid quarter. They wanted Walmart to also raise its forward expectations. → Ross Stores Earnings Beat Sends Stock To New Highs Prior to its post-earnings decline, Walmart shares had delivered a total return of approximately 25% over the past six months. This was nearly double the S&P 500’s return of around 13% over the same period. Walmart, however, maintained its full-year fiscal 2027 outlook. And after the stock’s sharp rally, that decision left investors with little incremental reason to keep bidding shares higher. Note that the company’s fiscal reporting period is several quarters ahead of the calendar year period. The company continues to expect full-year adjusted EPS in the...

Investors have a short week ahead—and a long list of retailer earnings to peruse. Quarterly results from companies including Dollar Tree, Burlington Stores, Gap and American Eagle Outfitters are set to land this week. They could offer more insights into how consumers are responding to high gas prices, rising inflation and a stalled job market. Investors are looking for clearer trend lines after mass retailers painted a somewhat muddled outlook. Last week, Walmart issued a soft forecast for the current quarter, though it maintained its full-year outlook. Target topped expectations and raised its outlook. Still, shares of both companies fell. Shoe and apparel companies had better luck impressing investors: Strong results boosted shares of VF Corp., the parent company of The North Face and Timberland; Amer Sports, the parent company of Arc’Teryx; and Ralph Lauren. Despite feeling downbeat about the economy, Americans have continued to spend, a break with historic norms. Investors are wondering how long that attitude will last, and they’ll get fresh data Tuesday when the Conference Board, an economic think tank, updates its Consumer Confidence Index. The week may also shed further light on the state of the AI trade after Nvidia's results last week. Dell Technologies, Synopsys, and Marvell Technology are set to hand in results. Dell and Synopsys executives have said demand remains brisk. The major stock indexes all ended last week with gains, closing out affairs with a modestly upbeat session that lifted the benchmark S&P 500 to an eighth consecutive week of gains. Investors tracked a potential thaw in U.S.-Iran relations, falling oil prices and earnings from Nvidia that showed the potential for the AI buildout to stay on track. Read Investopedia's full coverage of Friday's trading here. Stock and bond markets will be closed Monday for Memorial Day. Here's a look at notable events happening throughout the rest of the week. TradingView publishes a more detailed calendar, but clicking the link will take you off the Investopedia site. Tuesday, May 26: The Conference Board is set to update its U.S. Consumer Confidence Index at 10 a.m. ET. Consumers have been relatively pessimistic, though their mood brightened a bit last month. Wednesday, April 27: Best Buy (BBY) is slated to release its first-quarter results and host a conference call at 8 a.m. ET. The forum will gi...

Shares of big-box retailer Target (NYSE: TGT) slid about 4% after the company reported its fiscal first quarter of 2026 (the period ended May 2, 2026) earlier this week. At first glance, this reaction may be surprising. After all, the quarter offered the clearest evidence yet that Target's long-awaited turnaround is taking hold. And management was confident enough to raise its full-year sales forecast. Target said its comparable sales -- a measure of sales trends at stores and digital channels open for at least 13 months -- rose 5.6%, the company's first positive reading in five quarters. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » So why did the stock fall anyway? To appreciate how notable a 5.6% comparable-sales increase is for Target, it helps to remember where the retailer has been. Its comparable sales fell in each of the prior four quarters -- down 3.8%, then 1.9%, then 2.7%, then 2.5%, even as bigger rival Walmart kept growing. So, the swing back into positive territory, Target's strongest comparable-sales gain in about four years, marks a real change in direction. Even more, Target's business momentum was broad-based in the quarter. Its net sales rose 6.7% to $25.4 billion, with all six of Target's core merchandise categories growing and store traffic up 4.4%. And digital comparable sales jumped 8.9%, led by same-day delivery through the company's paid Target Circle 360 membership. Meanwhile, Target's higher-margin non-merchandise revenue, driven by its advertising business and its third-party online marketplace, grew nearly 25%. Much of this lands at the feet of Michael Fiddelke, who took over as CEO on Feb. 1 and quickly framed 2026 as a year of aggressive change. During Target's fiscal first-quarter earnings call, Fiddelke said the team would "make more change to what we sell and how we sell it in 2026 than we've seen in a decade." And early results suggest the strategy may be resonating with shoppers. But here's where the picture gets more complicated. While the top line looked great, Target's reported profit moved in the wrong direction. Net income fell to $781 million, or $1.71 per share, from $1.04 billion, or $2.27 per share, a year earlier. That said, the comparison is...