Walmart and Target test demand

Target reports first-quarter 2026 results on Wednesday, May 20, and Walmart follows on Thursday, May 21, according to the companies’ investor relations calendars. Those reports land less than a week after the U.S. Census Bureau said April retail and food services sales rose 0.5% from March to $757.1 billion, giving investors a fresh government reading on spending just before two of the country’s largest retailers update Wall Street. Walmart and Target matter beyond their own stocks because they sell across both staple and discretionary categories. Walmart said it generated $681 billion in fiscal 2025 revenue and serves about 270 million customers and members each week, while Target used its March 3 financial community meeting to lay out a 2026 plan built around restoring growth after what Chief Executive Michael Fiddelke called a “challenging year in 2025.” (corporate.target.com) ### Why are these two earnings reports being treated as a consumer checkup? The May 14 Census report showed retail trade sales up 5.2% from a year earlier and nonstore retailers up 11.1%, but it also said the monthly gain came with a confidence interval that includes zero. That leaves room for investors to look to company commentary for a more detailed read on what households are buying and where spending is slowing. (stock.walmart.com) Target and Walmart also reach different parts of the same shopper wallet. Target’s recent updates highlighted growth in food and beverage, beauty and toys, while Walmart’s prior quarterly materials pointed to strength in grocery and health and wellness, categories that tend to hold up better when shoppers pull back on larger discretionary purchases. (www2.census.gov) ### What has Walmart already said about essentials? Walmart’s investor site says the company’s latest reported fiscal year produced $681 billion in revenue, underscoring its scale in staple categories. In its first-quarter fiscal 2026 release last year, Walmart said U.S. comparable sales rose 4.5%, with “strong growth in health & wellness and grocery,” and said grocery share gains continued. (corporate.target.com) That earlier release also said higher transaction counts and unit volumes supported comparable-sales momentum. For investors heading into the May 21 report, those metrics matter because they help separate price-led growth from traffic and unit demand. ### What has Target said about discretionary categories? (stock.walmart.com) Target’s March 3 earnings release said fourth-quarter 2025 sales growth came from food and beverage, beauty and toys, while trends in essentials and home improved from the third quarter. The company also said non-merchandise sales grew more than 25%, helped by membership revenue, Roundel advertising and marketplace growth. (corporate.walmart.com) Target’s first-quarter 2025 earnings release last year showed a more mixed category picture. That release said key seasonal moments such as Valentine’s Day and Easter outperformed non-holiday periods, and it reported a one-time legal settlement benefit that lifted operating margin in the quarter, making category and traffic commentary more important than headline profit alone when investors compare current demand with last year’s base. (corporate.target.com) ### Why do suppliers care about the split between staples and discretionary goods? Suppliers watch volume, pricing and promotions at the same time. Walmart’s prior first-quarter release said gross margin rose 12 basis points, while Target’s 2026 guidance calls for an operating income margin about 20 basis points above its 2025 adjusted operating margin of 4.6%. Those figures show how small changes in category mix and markdowns can affect profitability even when sales are still growing. (corporate.target.com) Target’s March 10 announcement that it would lower prices on 3,000 spring products, including essentials, apparel and home items, is another signal suppliers monitor because broader price cuts can support traffic while putting more pressure on vendor funding and promotional calendars. ### What will investors look for this week? Wednesday, May 20, is the date for Target’s first-quarter 2026 earnings call, scheduled for 8 a.m. to 9 a.m. (corporate.walmart.com) EDT. Thursday, May 21, is the date for Walmart’s first-quarter fiscal 2027 earnings release at 7 a.m. U.S. Central time, according to its investor site. The next immediate data point after those calls is the Census Bureau’s May retail sales release on June 17, 2026, at 8:30 a.m. (corporate.target.com) EDT. Investors will also have Target’s and Walmart’s posted releases, presentations and transcripts to compare company commentary on grocery, discretionary demand, margins and inventory with the government’s monthly sales data. (www2.census.gov) (corporate.target.com)