Home Depot, Lowe’s and TJX reported fourth quarter and year-end results, citing concerns about weaker consumer spending despite several bright spots.
News Analysis
Walmart Inc.’s year-end financial results are a wide range of markets, food and consumer retailers working diligently to regain customers in stores after holidays and to buy more products in-store and online.
In response to analysts’ questions about the company’s decline in expectations, Walmart CEO John McMillion and CFO John David Rainey have repeatedly said they are happy with the company’s current growth and are suitable for the uncertain economic winds of the future. The company’s outlook reflects current reality, they said.
“Our outlook assumes a relatively stable macroeconomic environment, but we acknowledge that there is still uncertainty associated with consumer behavior and global economic and geopolitical conditions,” Rainey said.
Related Stories
Other retailers said this week they were trying to balance the same risks. Home Depot, Lowe’s and TJX companies reported fourth quarter and year-end financial results in one of the busiest revenue weeks for consumer-side retailers. Despite some bright spots, each retailer was concerned about how consumer spending and reliability would affect future sales and growth.
Following Home Depot’s Tepid Outlook, Bradley Johnson, senior analyst at KeyBanc Capital Market, said retailers are struggling to regain their footing due to weak consumer spending, the soft housing market and ongoing threats from e-commerce retailers.
In a research note shared in an email with the Epoch Times, Johnson said almost all brick and mortar retailers are “facing an increasing threat from e-commerce and Amazon.” Although the housing improvement sector historically has less risk from e-commerce, he said that increasing online competition, or the need to invest more in digital shopping experiences, could negatively impact future sales margins.
Johnson said their outlook reflects “short-term uncertainty in the housing improvement market,” despite better than expected financial results from the two biggest housing improvement giants in the country.
On the apparel side of the retail sector, parents of discount retailers TJ Maxx, Marshalls and HomeGoods also reported mixed results this week. The results for TJX companies in the fourth quarter of fiscal year 2025 were significantly better as they came into contact with nearly record highs following their better than expected revenue on February 26th.
Unlike Walmart, Home Depot, Dillard and other consumer retailers who have lowered their 2025 outlook, Hermann has expressed optimism that the Framingham, Massachusetts-based apparel chain could continue to provide stunning value to high-quality brands and statistics throughout the year.
“When we start in 2025, we are excited about the opportunities we will see in our business, and we plan a number of initiatives to drive more sales and traffic to our stores and online,” he said, noting that the company has reached a major milestone, opening its 500th store in the quarter.
“We believe Walmart Effect is increasing steam because “Walmart Effect” leverages a higher margin of alternative revenue streams. This will increase the price gap by increasingly supporting core retail operations and providing more services and direct competitors.”
