Key Takeaways

• Big-box earnings reports will offer a snapshot view of consumer health and sentiment when they arrive next week.

• Walmart is slated to hold its earnings call Tuesday, followed by Target on Wednesday.

• New retail data shows spending picked up in October ahead of the holiday season.
  

Walmart and Target will report earnings next week, providing fresh insight into how consumers are faring shortly after retail data indicated that Americansa have been spending more on "fun" categories.

The chains are just two of the retailers set to deliver their latest quarterly results and, potentially, update their outlooks ahead of the holiday period. Walmart (WMT) and Target (TGT) together accounted for some $140 billion in U.S. sales in their latest quarters, and Wall Street expects them to collectively turn in more than $470 billion in holiday-quarter revenue, according to Visible Alpha estimates.

The updates are due as analysts say fewer consumers have been holding back. October retail sales were up 0.4% from September, when core spending shot up at the fastest monthly rate since January 2023, Wells Fargo economists wrote Friday after the Commerce Department reported the latest data.

"Giddy up Jingle-horse," they wrote. "An otherwise lackluster year for retailers is gaining some last-minute momentum just as holiday sales get underway."

Walmart is scheduled to turn in its numbers before the market opens Tuesday. The retailer estimates it serves 255 million customers a week, and its leaders detailed their shifting shopping habits on last quarter's call: CFO John David Rainey said then that high-income consumers were flocking to the company for its Walmart+ membership program and delivery service, while executives also noted a growing appetite for private labels, particularly for food.

Target's third-quarter call is scheduled for Wednesday morning. The Minneapolis-based brand says it sees 30 million people a week. During its last earnings call, CEO Brian Cornell told investors shoppers were more comfortable spending on discretionary items again and noted that apparel sales grew for the first time in more than a year.

Other reports due next week may offer additional context. TJX Cos. (TJX), which owns TJ Maxx, Marshalls and HomeGoods, is slated to release its results Wednesday morning. Ross Stores (ROST) plans to release its report Thursday afternoon.

Consumers in 'Average' Shape as Holidays Approach

Americans spent more last month, with eight of 13 retail categories posting gains in the Commerce Department data. With price increases slowing, people are able to direct more dollars toward electronics, restaurants and other "fun" categories, Wells Fargo noted: Grocery bills, for example, grew 0.1% from September to October.