What Target vs. Walmart earnings tell us about the consumer

Target (TGT) recently posted its first-quarter earnings, missing out on Wall Street estimates, revealing a loss of 3% in comparable sales year-over-year and a drop in US traffic by 1.9% year-over-year. Meanwhile, in Walmart's (WMT) recent quarterly report revealed an increase in comparable sales and US traffic by 3.8% year-over-year.

Yahoo Finance Retail Reporter Brooke DiPalma joins Wealth! to compare the earnings figures between these two retail giants and what they signal about the consumer.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video transcript

Target is out with its first quarter earnings report today and it didn't impress Wall Street, the company's executives citing inflation as a big reason for a decline in traffic and transactions.

And meanwhile, you'll remember rival Walmart reported last week and they said the despite an inflation strapped, consumer shoppers are looking for value.

We wanna dig into what these reports from the two biggest us retailers say about the consumer.

And here with more in the details.

We've got Yahoo Finance's Brooke Dipalma here.

So Brooke, let's break it down.

Yeah, good morning Brad.

It really is the tale of two retailers that we're seeing here target falling in early trading.

Whereas Wal Mart roughly flat at around the open here and really is uh same source sales from target disappoint on the street down roughly 3.7%.

Now just last week, we saw same source sales from Walmart impress the street with the upside of 3.8%.

What this means.

Consumers are going to Wal Mart for those value deals.

They really are very impressed with the deals, the price point and everything that Walmart has to offer.

We know that they've been ramping up their assortment and certainly ramping up their offerings in recent years.

Now, in addition to that, to prove that consumers are growing more, take a look at these traffic numbers we saw in the latest quarter target, see traffic fall 1.9%.

But we saw Walmart increase their foot traffic up 3.8%.

I won.

Mart has largely been known to gain foot traffic over the past few years, especially post pandemic when consumers' wallets became pinched and they saw, hey, Wal Mart is doing all these makeovers.

All these store renovations starting to look a lot like a target.

Where am I going to get the best thing for my buck?

And they're certainly going to Walmart these days.

Certainly.

And so Brooke, how about targets ecommerce performance here from, from what we're tracking and how that is ultimately comparing.

What are we seeing there?

Yeah.

Well, if you take a close look at the two of them compare target did see a bit of an uptick in e commerce.

And the Ceo Brian Cornell alluded that increase in digital sales for the first time in more than a year, I should point out was same day services, drive up in store pickup and same day delivery, pushing those target e commerce sales higher up 1.4%.

Now Walmart also saw e commerce sales jump 2.8%.

Walmart point on the call last week value and convenience is really what consumers are looking for right here.

Not only are they looking for low prices, but they want easy pick up, they want to go in and out of the store quickly or they want to deliver to the house and Target, starting to pick up on that.

We saw them relaunch their Target Circle rewards program back in April.

And so they're certainly looking to catch on to what consumers really want these deal, uh, these days value and convenience as well.

Yeah, looking for a lot of convenience and same day services too that was cited within the earnings report.

Brooke.

Thanks so much for breaking this down.

Appreciate it.