Retail Roundup: Consumer and Food Retailers Pressured by Walmart’s 2025 Outlook

Home Depot, Lowe’s, and TJX reported fourth-quarter and year-end results, citing concerns over weakening consumer spending despite some bright spots.

The TJ Maxx store at the Mall at Prince George's in Hyattsville, Md., on Aug. 17, 2022. Chip Somodevilla/Getty Images

News Analysis

One week after Walmart Inc.’s year-end financial results shook the broader market, food, and consumer retailers are feverishly working on getting customers back in stores after the holidays and enticing them to buy more products in-store and online.

During Walmart’s fourth quarter conference call with Wall Street analysts on Feb. 20, the Bentonville, Arkansas-based retail giant’s top executives offered a tepid outlook for 2025, expressing concern about President Donald Trump’s reciprocal tariffs and rising prices for everyday staples like eggs, meat, and chicken.

As a key bellwether for the U.S. and global economy, Walmart now expects earnings between 57 and 58 cents per share in the first quarter, well below Wall Street’s expectation of 64 cents. For the full year, the retail giant expects to report earnings in the range of $2.50 to $2.60 per share, well below analysts’ consensus of $2.77, according to FactSet.

In response to analysts’ questions about the company’s lowered expectations, Walmart CEO John McMillion and CFO John David Rainey reiterated that they are pleased with the company’s current growth and are well-positioned for the uncertain economic winds ahead. The company’s outlook reflects the current reality, they said.

“Our outlook assumes a relatively stable macroeconomic environment but acknowledges that there are still uncertainties related to consumer behavior and global economic and geopolitical conditions,” said Rainey.

Other retailers said this week that they are trying to balance that same risk. Home Depot, Lowe’s, and TJX Companies reported fourth-quarter and year-end financial results in one of the busiest earnings weeks for consumer-side retailers. Despite a few bright spots, each retailer was concerned about how weakening consumer spending and confidence could impact future sales and growth.

On Feb. 25, Home Depot reported adjusted earnings per share of $3.13 on revenue of $39.7 billion in the fourth quarter of 2024. Despite those results beating Wall Street expectations, Home Depot’s CEO Ted Decker told analysts during the company’s earnings call that he was not expecting a big turnaround in the housing market in 2025 because of stubbornly high mortgage rates.

Following Home Depot’s tepid outlook, Keybanc Capital Market senior analyst Bradley Johnson said retailers are struggling to regain their footing due to weak consumer spending, a soft housing market, and the continued threat from e-commerce retailers.

In a research note shared with The Epoch Times via email, Johnson said nearly all brick-and-mortar retailers “are facing a growing threat from e-commerce and Amazon.” Although the home improvement sector historically faces less risk from e-commerce, increased online competition or the need to invest more in a digital shopping experience could negatively impact future sales margins, he said.

Home Depot’s chief rival, Lowe’s Companies Inc., also posted strong fourth-quarter results, reporting net income of $1.99 per share compared with $1.77 per share a year ago, easily beating Wall Street’s expectations of $1.84 per share.

Despite those better-than-expected financial results from the nation’s two largest home improvement giants, Johnson said their outlooks reflect “near-term uncertainty in the home improvement market.”

On the apparel side of the retail sector, the parent of discount retailers TJ Maxx, Marshalls, and HomeGoods also reported mixed results this week. TJX Companies’ results in the fourth quarter of fiscal 2025 were significantly better, as the company’s stock touched near-record highs following its better-than-expected earnings on Feb. 26.

The Boston-based value retailer reported earnings of $1.23 per share, topping analyst consensus of $1.16. Revenue was flat from a year ago at $16.4 billion, but just above Wall Street views of $16.2 billion. Same-store sales, a key industry performance metric, jumped 5 percent, while analysts projected only 3.1 percent growth.

In the company’s conference call with analysts, TJX CEO Ernie Herrman recognized his team’s “excellent execution across the company, which led to above-plan results.” “Clearly, our great values, gifting assortment and freshness of our mix resonated with our shoppers during the holiday season,” said Herrman.

Unlike Walmart, Home Depot, Dillard’s, and other consumer retailers, which have lowered their 2025 outlook, Hermann expressed optimism that the Framingham, Massachusetts-based apparel chain with a loyal and dedicated customer base could keep delivering shoppers outstanding values on high-quality brands and fashions throughout the year.

“As we begin 2025, we are excited about the opportunities we see in our business and have many initiatives planned that we believe will further drive sales and traffic to our stores and online,” he said, noting that the company reached a major milestone of opening its 500th store during the quarter.

Meanwhile, next week could bring worse results for the retail sector as the market awaits the fourth-quarter earnings for Target Corp., Dollar General, and Dollar Tree in the first two weeks of March. Not only are those companies dealing with internal issues such as DEI backlash, management makeovers, and the same tariff and consumer pressures as other retailers, but they must compete directly with Walmart, according to analyst Scot Ciccarelli at Truist Securities.

“We think the ‘Walmart effect’ is gaining steam, as the company leverages its higher-margin, alternative revenue streams … to increasingly subsidize their core retailing operations and widen their price gaps by [providing] more services versus direct competitors,” especially Target Dollar General and Dollar Tree, Ciccarelli told the Epoch Times via email.