US store earnings show shopper resilience, but some struggle

It has been a volatile year for US retailers, but their latest round of earnings reports shows an emerging divide that could define the crucial holiday season.

- EMMETT LINDNER

Black Friday shoppers at a mall in Albany, New York, last year. The holiday shopping season is a critical period for retailers.

(NYT)

Retailers that focused on value, even at the high end, did well, according to quarterly earnings calls and statements lastmonth. Companies that didn’t meet sales or profit expectations missed key trends or suffered from poor management, analysts said.

“In today’s world, with these earnings across all the sectors, it does come down to how you're running your business and are you playing to the trends that the consumer is interested in,” said Jessica Ramirez, a retail analyst and co-founder of the Consumer Collective, a company that tracks consumers.

Here's what the retailers had to say about what is shaping their outlook:

Walmart, the largest retailer in the United States, outpaced its competitors as expected. Its revenue for its most recent quarter (the three months through October) rose about 6% from a year earlier. The company, which has about 7,400 rollbacks — temporarily discounted items — in place, with more than half of them in the grocery aisles, is benefiting from an influx of shoppers from higher-income families, its CEO, Doug McMillon, said ona call with analysts on Nov 20.

“Middle-income households have been steady, and while lower-income families have been under additional pressure of late, we're encouraged by how our teams are meeting them with greater value across necessities and doing what we can to help them stretch their dollars further,’ he added.

But as Walmart raised its sales outlook for the year, its rival Target did the opposite.