This week’s earnings calendar is stacked with retailers – giving us a bird’s eye view of how inflation is affecting consumer spending. According to Michael Reinking, senior market strategist at the New York Stock Exchange, “results from both Walmart (WMT) and Home Depot (HD) suggest the consumer continues to be resilient,” and “relief at the pump has helped on this front.”
Both retailers reported higher-than-expected earnings and revenue in their second quarter and reiterated their full-year guidance. “Hopefully this shows that the inventory problems have been priced in, as Walmart threw the kitchen sink at guidance last quarter,” says David Wagner, portfolio manager at financial advisory firm Aptus Capital Advisors.
As for Home Depot, Wagner is encouraged that customer transactions remain higher compared to Q2 2019 and bigger average receipts (+9.1% year-over-year) “indicates we’re past peak pricing.”
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Looking at current consumer spending trends, Walmart says back-to-school season is off to a strong start, and John Furner, CEO of Walmart U.S., points to three contributing factors. “One is there are more customers shopping in the brand than we’ve seen previously, including better traffic numbers. Fuel prices did come down throughout the month of July. And I think the third [thing] that’s important is school attendance levels, we think, will be higher,” Furner said in the company’s second-quarter earnings call.
“During these inflationary times, conscientious consumers have looked to Walmart for its lower prices on essential goods, especially when the company has made past efforts to increase the quality of food,” says Wes Gottesman, market advisor at Web3 trading platform TradeZing. “In regard to inventory and the outlook for the anticipated holiday season, we feel that Walmart is poised for success.”
Gottesman feels the same about fellow big-box retailer Target (TGT), even though the company this morning said its second-quarter profit was down almost 90% from the year-ago period. The plunge occurred as TGT slashed prices on excess inventory.
“The decision to dispose of unwanted inventory, although initially shocking to its profits, may prove necessary in the future as we approach the major holidays,” Gottesman says. “Target is a hub for decorations and other holiday essentials for Halloween, Thanksgiving, Hanukkah, Christmas and New Year’s Eve. In order to meet the inventory demand for the upcoming seasons, they had to relinquish the unwanted. This move was for the future success and profitability of Target.”
-
Your End of Year Insurance Coverage Review ChecklistStop paying for insurance you don't need and close coverage gaps you didn't know about with this year-end insurance review.
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
Nasdaq Rises 2.7% as Musk Tweets TSLA Higher: Stock Market TodayMarkets follow through on Friday's reversal rally with even bigger moves on Monday.
-
Dow Erases 717-Point Gain to End Lower: Stock Market TodayThe main indexes started the day with solid gains, but worries of an AI bubble weighed on stocks into the close.
-
Dow Trims Its Loss to 498 Points: Stock Market TodayMarkets are wondering more and more about returns on the enormous amounts of capital hyperscalers are investing in AI.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
