Walmart is still king of Retail America as Target sales continue to slide
The former is now worth about 18x as much as the latter.
It’s been a big week for retail, with the effects of tariffs fully setting in for some of America’s best-known store chains as they report results for the second quarter.
On Thursday, Walmart shares fell more than 4% after the company posted its first quarterly profit miss since May 2022, with adjusted earnings per share falling below expectations — despite US same-store sales growing almost 5%, topping forecasts and bringing in more than $177 billion in revenue.
While there were aspects of Walmart’s results that investors were less than enthusiastic about, including hints at further price hikes, there was also plenty to like: the company cited its massive supply chain and dominant market position as reasons it can keep its price rises below the national average. However, in the face of tariffs and slumping consumer spending, not all retailers are faring so well.
Wide of the mart
Just a day before, Target, one of Walmart’s biggest competitors, reported pretty much the exact opposite situation. Though earnings came in above expectations, same-store sales fell 1.9% and profit dropped by almost 20% — marking the retailer’s 11th consecutive quarter of flat or falling sales. Target stock sank ~6% in Wednesday trading, seeing its market cap get dragged even further behind its rival.
With Target’s model reliant on international goods — it imports roughly half of its merchandise, compared with ~33% at Walmart, per CNN — the retailer needs to raise prices even further to mitigate the impact of tariffs. But even before that, Target was struggling to draw customers from discount chains and e-commerce giants like Amazon.
Now, Target is hoping that a leadership shake-up might help to get sales out of the red. Around its quarterly results, the company announced that CEO Brian Cornell will step down in February after more than a decade, with current Chief Operating Officer Michael Fiddelke, who’s been at the company for 22 years, set to take the helm.
