Walmart’s profit target focuses on new CEOs Furner and Fidelke

when walmart and target When holiday earnings are released this quarter, investors may be quick to ignore the results.

Instead, it will focus more on the future of the two major retailers under new CEOs and the outlook for U.S. consumers in 2026.

Both companies underwent management changes this month. Walmart CEO John Farner and Target CEO Michael Fidelke, both longtime insiders, assumed their roles on February 1.

Rival retailers have grappled with similar economic challenges. U.S. consumers are still spending, but they are buying selectively, as inflation and tariffs have driven up the prices of groceries and other essentials, causing some shoppers to think twice about discretionary purchases.

But even though both Walmart and Target have new CEOs, their paths forward look distinctly different.

As of Tuesday’s market close, Walmart stock had risen about 163% over the past five years and about 24% in the last year. It hit a 52-week high on Tuesday. Meanwhile, Target stock has fallen about 40% in the past five years and 9% in the past year.

Retailers’ stock market performance reflects sharp divergences in sales performance. Walmart attracts shoppers of all income levels and is gaining momentum with high-margin businesses such as online sales and advertising. Target has been struggling with sluggish sales and low foot traffic in its stores. Walmart expects full-year net sales to rise 4.8% and 5.1%. Target, on the other hand, is expected to see a decline in full-year sales.

Neil Saunders, managing director and retail analyst at GlobalData, said Walmart CEO John Furner inherited a business that was “fundamentally sound” and “on a great trajectory.”

“In many ways, his job is to think about what can be done to stabilize the ship and speed it up,” he said.

Meanwhile, Target CEO Michael Fidelke needs to “sell the future of Target” after four years of nearly flat annual sales, Sanders said.

“I think what he wants to do is inject some excitement and say, ‘Look, I’m really excited about this role. I’m really excited about where Target is going. We’re going to change things up. We’re going to be a different business. We’re going to get back to where we were before,'” he said.

Let’s take a closer look at what we know so far about the CEO’s plans and what investors will be watching during the earnings call.

Walmart is scheduled to report fourth-quarter results before the bell on Thursday.

Retail giant Walmart has had a busy few months. In addition to a new CEO, Walmart’s market capitalization exceeded $1 trillion in early February. The company also switched its stock listing from the New York Stock Exchange to the tech-heavy Nasdaq 100 in January, a nod to the company’s aim to be perceived by investors as similar to its main rival Amazon.

When longtime CEO Doug McMillon stepped down from his role, he said in an interview on CNBC’s “Squawk Box” that Furner would take over as the company accelerates its adoption of artificial intelligence and reshapes its business and the way customers shop.

Walmart announced agreements with two major AI chatbot platforms, OpenAI’s ChatGPT and Google’s Gemini, to help shoppers discover and purchase its products.

Kate McShane, a retail analyst at Goldman Sachs, said Farner, who, like his predecessor, rose through the ranks at Walmart over the decades at the Arkansas-based company and previously ran the company’s largest division as CEO of Walmart US, was selected in part because of his success in expanding the company’s digital business, which is a critical part of Walmart’s future.

In May, Walmart posted its first profitable quarter for its U.S. and global e-commerce business, as its delivery business, advertising business and third-party market all grew.

Corey Tarlow, a retail analyst at Jefferies, said Walmart investors “want more of the same” — more gains in e-commerce, more success for the grocery store and more market share with a broader range of customers, including wealthier shoppers.

But Walmart’s holiday quarter results could be a turning point for the retail industry. Amazon could become the biggest retailer by annual revenue for the first time, even though it derives significant revenue from technology services such as cloud computing and advertising.

Sanders said the comparison is not an apples-to-apples comparison, but is “symbolically important” as the two competitors compete against each other. Walmart has grown by relying on its stores to deliver groceries and pick up online orders. Amazon, which recently announced it would close Amazon Fresh and Go stores and convert some into Whole Foods stores, was trying to “add” fresh produce to its existing massive online ordering, he said.

Walmart, the nation’s largest grocer by sales, could also feel the growing heat from supermarket operators as it fends off an expansion by privately held discounter Aldi. krogerrecently hired Walmart alumnus Greg Foran as its new CEO.

In a memo sent to employees on his second day as CEO, Furner said his leadership is shaped by his more than 32 years at Walmart, adding that he believes the company is “well positioned to lead in the next era of retail.”

“The next era will unlock new ways to realize visions, led by people and harnessing the power of technology,” he said in the memo. “By leveraging our global scale, we will be able to provide speed, reliability and a better experience for our customers and members, no matter where they shop.”

“The strategy is already coming to fruition, as technology and AI help reduce work friction, simplify decision-making, improve inventory flow and save time so we can focus on what matters most: serving our customers, members and each other.”

For Fidelke, Target’s earnings report could be the deepest look yet at the cheap-chic discounter’s roadmap to return to growth.

The company is aiming for a comeback and is scheduled to announce its holiday quarter results and forecast for the current fiscal year at its financial meeting on March 3 at its Minneapolis headquarters.

The retail giant has battled countless challenges, including a decline in visitors to its stores and website, customer complaints about conditions in its stores, and backlash over its political and social stances, including a reversal of its diversity, equity, and inclusion pledge and a decision not to publicly oppose a surge in local immigration enforcement.

As sales declined, Target cut its workforce. The company cut 1,800 corporate roles last year in its first major layoffs in a decade.

Goldman Sachs’ McShane said Target’s earnings report is more anticipated than Walmart’s because there are many questions about the company’s turnaround strategy and how long it will take. Investors have been debating how much the company needs to invest in merchandising, marketing and store staffing costs to boost sales.

“Walmart has pursued a much more aggressive digital agenda than Target, between omnichannel, automation, and marketplaces,” she said.

He added that Target doesn’t want to be Amazon or Walmart, but “we have to think about who we want to be and how we’re going to compete.”

Fidelke has already signaled that he will make a change. Last week, he announced in an email to employees that he would increase store staffing, but Fidelke and the company did not say how much they would invest in additional employee hours. The company will also eliminate approximately 500 roles in distribution centers and regional offices.

Mr. Fidelke announced his high-profile departure on Sunday, reshuffling Target’s management team and reinstating the role of chief merchant. Carla Sylvester, former chief guest experience officer, has become Target’s chief merchandising officer, and Lisa Roos, former chief merchandising officer for food, essentials and beauty, has replaced Mr. Fidelke as chief operating officer.

At the same time, Rick Gomez, chief commercial officer, is leaving the company after more than 10 years, and Jill Sand, chief merchandising officer of Fun 101, the apparel and accessories, home goods, and toys and entertainment division, is leaving the company.

Target also opened a new concept store in New York City’s SoHo neighborhood. McShane said that while the location is unique, its focus on fashion could lead to further changes to stores across the country and in the suburbs.

This push to feature more powerful products is a key part of Fiddelke’s strategy. In an email to employees and customers during his first week on the job, Fidelke laid out four priorities: strengthening Target’s merchandising, improving the customer experience, advancing technology and strengthening the company’s employees and surrounding communities.

Jefferies’ Tarlow said Target’s upcoming investor events are “basically an opportunity for Target to communicate with everyone and say, ‘We hear what you want. How are we going to make it happen?'”

“Change is happening. The question is whether the market will see it and appreciate it,” he said.