Target vs. Walmart
source:Yahoo Finance
Apparently, growing faster doesn’t always win you the checkout line.
Last quarter, Walmart grew revenue 7.3%. Target managed 6.7% — the slowest growth among the four big-box retailers we tracked.
Then the stocks went in opposite directions.
Target beat revenue, EPS and gross-margin expectations, and its shares climbed 21.7% after the report. Walmart beat on revenue too, but softer-than-expected earnings guidance helped send its shares 11.9% lower.
Now we get the rematch.
Target reports Wednesday. Walmart follows Thursday.
And beyond who beats or misses, these two reports give us something more useful: two very different reads on where the American consumer is spending…
Here is the story. ⇩
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The Numbers.
At first glance, these don’t look like two dramatically different quarters.
Walmart actually grew faster: 7.3% vs. Target’s 6.7%. Both beat revenue expectations.
Then came the part Wall Street cared about.
→ Target $TGT ( ▲ 0.97% ) delivered the bigger revenue beat, topped EPS expectations and raised its outlook.
→ Walmart’s $WMT ( ▲ 0.76% ) quarter was solid, but its forward EPS guidance came in below what analysts expected.
Target shares climbed 21.7% after reporting. Walmart fell 11.9%.
The stock reactions diverged almost entirely on guidance, not on the quarter itself.
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Good Quarter. Wrong Outlook.
The contrast is hard to miss. Both retailers beat revenue expectations, and Walmart actually posted slightly faster growth.
But investors were already looking past Q1.
Target paired its beat with a stronger outlook, while Walmart’s forward EPS guidance came in below Wall Street expectations.
✱ The result was a roughly 34-percentage-point difference in their post-earnings stock performance, despite comparable underlying revenue growth.
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What’s New At Target? Quite A Lot.
Target enters Q2 with more than a better stock chart. The company has been reworking what shoppers actually find on the shelves — adding 3,000 new beauty products, refreshing 75% of home décor and making more than half of its back-to-school assortment new.
Technology is getting its own reset, too. Target hired its first Chief AI Officer, with a mandate spanning inventory and the shopping experience.
Now comes the harder part: proving those changes are showing up in the numbers.
Wall Street is looking for roughly +2.3% comparable sales and $2.29 EPS, helped by an easier comparison with last year’s weaker quarter.
Analysts are split on what happens after that.
1 Jefferies’ Corey Tarlowe believes the market is underestimating how durable Target’s traffic improvement could be.
2 Deutsche Bank’s Krisztina Katai wants more evidence that the gains extend beyond favorable year-over-year comparisons.
The turnaround is in motion. This week tells us how much of it has reached the shopper.
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Walmart Has A Different Test.
Walmart enters this week from almost the opposite direction.
Walmart Q2 FY2027 expectations:
→ EPS: $0.73-$0.74 (top of Walmart’s own $0.72-$0.74 guidance range)
→ Revenue: $186.3-186.8 billion, +7.4% YoY
→ US comp sales (ex-fuel) expected: +3.57%, down from +4.1% last quarter
→ Estimates have been trending down: 73 cents now vs 74 cents a month ago vs 75 cents three months ago
→ Full-year FY2027 guidance: adjusted EPS $2.75-$2.85
RBC’s Steven Shemesh sees Walmart and Target together as a broader check on the health of the U.S. consumer.
And Walmart offers a different lens: its enormous exposure to groceries and everyday essentials makes its results particularly useful for seeing how households are spending when they have less discretion over what goes in the cart.
In short, Walmart’s numbers read more like a macro signal than a company-specific turnaround story.
Put simply: one report tells us how the turnaround is progressing. The other helps tell us how the consumer is holding up.
By Thursday, we’ll know whether the gap is closing — or getting wider.
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