With a mixed picture of consumer demand emerging over the past quarter, earnings results from Walmart and Target will shed light on what lies ahead for US retailers ahead of Black Friday.
Retailers had a lot of unsold clothing after last year’s turbulent holiday season, when inflation peaked and shoppers focused on buying necessities like bread, milk, and toothpaste. Wall Street is hoping that recent economic data indicating food disinflation and higher wages will encourage shoppers to open their wallets this season.
However, investors are hesitating because to mounting credit card debt, depletion of pandemic-era savings, and increased interest rates. They are anticipating that retail heavyweights like Walmart and Target would have excess inventory and will have to provide discounts during the holiday season.
The US Christmas sales in 2023 are expected to increase at the slowest rate in five years, according to the National Retail Federation. Black Friday, the day after Thanksgiving, is when the holiday shopping season officially starts. However, as early as October, Walmart and Target started to offer some holiday specials.
Based on LSEG data, Walmart is anticipated to announce a 4.4 per cent increase in third-quarter revenue due to its emphasis on selling food. Walmart declared last month that it would provide components and pre-packaged Thanksgiving meals at less expensive costs than the previous year. Additionally, it has started a US $ 9 billion shop renovation project.
On the other hand, Target is predicted to report a 4.8 per cent decline in sales. Sales of toys, electronics, home items, and clothes account for about half of its total sales.
