U.S. cash equities markets remain closed on Sunday, but investors are bracing for a pivotal week of retail earnings. Five major retailers—Home Depot (NYSE:HD), Target (NYSE:TGT), Lowe's (NYSE:LOW), TJX (NYSE:TJX), and Walmart (NASDAQ:WMT)—are scheduled to report results between Tuesday and Thursday, alongside agricultural equipment maker Deere (NYSE:DE). The reports come on the heels of a disappointing July retail sales report, which showed a 0.6% decline, the first drop in nine months and well below the 0.1% increase economists had forecast.
The July sales data, released last week, also revealed that core retail sales, which feed into GDP calculations, fell by 0.4%. The unexpected weakness has raised questions about the resilience of the U.S. consumer. Investors are now asking whether the downturn was a temporary blip caused by calendar effects—such as the timing of Amazon's Prime Day—or a more concerning signal that rising fuel prices and slowing hiring are starting to erode household spending power.
This week's earnings will provide a critical test. The reports span home improvement, mass merchandise, off-price apparel, and agricultural machinery, offering a broad read on consumer behavior across income levels and spending categories. The results will be scrutinized not just for headline earnings per share, but for forward-looking guidance and same-store sales trends, which many analysts consider more telling than bottom-line beats.
Key Reports and What to Watch
Home Depot kicks off the week on Tuesday, August 18, with its earnings call scheduled for 9:00 a.m. ET. The company faces muted core demand, with first-quarter revenue up 4.8% but comparable sales edging up just 0.6%. CEO Ted Decker has cited persistent housing affordability challenges and consumer caution. Consensus EPS is $4.73, roughly flat year-over-year, but analysts will focus on second-half comparable sales guidance. Oppenheimer's Brian Nagel, who forecasts EPS of $4.66, notes that elevated mortgage rates continue to hinder major remodeling activity, making it difficult to identify significant growth catalysts.
Target reports on Wednesday, August 19, at 8:00 a.m. ET. The retailer is seen as a turnaround story, with first-quarter comparable sales up 5.6%, traffic growth of 4.4%, and digital sales rising 8.9%. Non-merchandise revenue, including advertising, membership, and marketplace income, climbed nearly 25%. Investors will watch for continued traffic gains and margin improvement. Wolfe Research's Spencer Hanus rates Target as a top pick with a $160 price target, citing improved store execution and customer trends.
Lowe's also reports on Wednesday at 9:00 a.m. ET. The company posted 0.6% comparable sales growth and a 15.5% increase in online sales last quarter. Analysts will assess DIY demand resilience and the contribution from recent acquisitions. Citi maintains a Buy rating on Lowe's with a $285 price target, arguing that smaller projects and market-share gains offer support. TJX, reporting before the open on Wednesday, saw a 6% jump in comparable sales and a 29% EPS increase last quarter, leading to an upgraded full-year outlook. The off-price retailer will be a key gauge of trade-down demand and merchandise margins.
Walmart and Deere Round Out the Week
Walmart reports on Thursday, August 20, with materials released around 6:00 a.m. CT and a call at 7:00 a.m. CT. Consensus EPS is $0.74, up about 8.8% year-over-year. Jefferies analyst Corey Tarlowe expects results to meet expectations, with continued benefits from e-commerce margins and advertising revenue. He notes that channeling tariff refunds into price cuts could boost store traffic, though margin gains may take time. Oppenheimer downgraded Walmart to Perform in early August, citing limited near-term upside at a rich valuation.
Deere, reporting Thursday at 9:00 a.m. CT, will expand the lens beyond retail. The company's results may indicate whether rising energy and input costs are pressuring farm incomes, which could dampen demand for agricultural equipment. Consensus EPS is $4.69, and analysts will look for full-year farm-equipment outlook. The report will also have implications for rural spending and broader economic trends.
Market Context and Risks
The S&P 500 recently surpassed Wall Street's median year-end target, trading within 214 points of J.P. Morgan's 8,000 goal. This suggests that equities have priced in a relatively optimistic outlook, leaving little room for disappointment. The upcoming earnings could either reinforce that optimism or expose vulnerabilities in consumer spending.
However, several risks cloud the picture. July's sales figures were affected by the earlier timing of Prime Day and lower gasoline prices. A single month's data may not signal a lasting trend. Geopolitical events, fluctuating fuel costs, and company-specific promotions could also distort year-over-year comparisons. Investors will need to parse the noise to determine whether the consumer slowdown is real or merely a seasonal artifact.
As the week unfolds, the market's reaction to these earnings will offer valuable clues about the health of the U.S. economy. With the Federal Reserve's next policy meeting on the horizon, the data could also influence expectations for interest rates. For now, all eyes are on the retailers.
