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 Earnings Preview: Walmart, Target, Home Depot, and Lowe's Q2 2025 Results – What Investors Need to Know Next Week

Introduction

Hey there, fellow investors and market watchers! If you're tuned into the pulse of the U.S. economy, you know that retail earnings reports are like a crystal ball for consumer health. Next week, starting August 19, 2025, we'll get fresh data from some of the biggest names in the game: Home Depot on Tuesday, followed by Lowe's and Target on Wednesday, and Walmart wrapping things up on Thursday. These retail bellwethers—Walmart, Target, Home Depot, and Lowe's—aren't just reporting numbers; they're painting a picture of how Americans are spending amid lingering inflation concerns, a softening job market, and shifting trends like back-to-school shopping and home improvement projects.

Why does this matter? Retail sales make up about 70% of U.S. GDP, and these companies serve as proxies for broader economic trends. With July 2025 retail sales rising 0.5% month-over-month—aligning with expectations and following a 0.9% gain in June—there's optimism, but also caution. Consumer spending is forecasted to grow 1.4% this year, but risks like higher tariffs and a cooling labor market could dampen momentum. In this in-depth blog post, we'll break down what to expect from each company's Q2 2025 earnings, dive into sector trends, and offer actionable advice to help you navigate your portfolio. Whether you're a day trader eyeing stock volatility or a long-term investor assessing economic resilience, stick around—we've got the details you need.

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Overview of the Retail Sector in 2025: Trends Shaping Consumer Spending

Before we zoom in on individual companies, let's set the stage with the bigger picture. The U.S. retail sector is on track for steady, if modest, growth in 2025. According to forecasts, total retail sales are expected to climb between 2.7% and 3.7% over 2024, reaching $5.42 trillion to $5.48 trillion. This comes after a resilient July, where retail spending advanced broadly, signaling solid consumer demand despite headwinds.

Key trends influencing the sector include:

• Inflation and Price Sensitivity: With inflation cooling to around 2.4% year-over-year, shoppers are still hunting for value. Retailers like Walmart and Target are leaning into promotions, such as Walmart's 14-item school supplies bundle for $16—the lowest in six years.
• Back-to-School Boost: This season is a major driver, with families planning to spend an average of $858 on K-12 essentials, up from last year. Total back-to-school spending could hit $128.2 billion, a 2.23% increase. Events like Walmart Deals and Target Circle Week have already captured early shoppers, with 34% and 25% participation, respectively.
• Housing Market Stagnation: A frozen housing market—due to high mortgage rates and affordability issues—is impacting home improvement retailers. Home values have surged over the past five years, but sales activity remains subdued, with growth expected at just 3% or less through 2025. However, renovation spending rose 0.5% to $513 billion in Q1 2025, driven by aging homes (nearly half built before 1980).
• E-commerce and Omnichannel Growth: Digital sales continue to rise, with Walmart and Target reporting strong online gains in recent quarters. Overall, consumer durables retail is projected to grow 2.3% in 2025.

These trends suggest a resilient but cautious consumer base. For investors, keep an eye on how these play out in earnings—strong same-store sales could signal economic strength, while misses might hint at broader slowdowns.

For more on retail sector forecasts, check our related article: 2025 U.S. Retail Outlook: Growth Amid Uncertainty. Externally, the National Retail Federation's reports are a goldmine: NRF Back-to-School Survey.

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Walmart Earnings Preview: Steady Growth in a Value-Driven Market

Walmart (WMT), the world's largest retailer, reports on Thursday, August 21, 2025. As a bellwether for everyday consumer spending, its results will offer clues on low-to-middle-income shoppers' resilience.

Past Performance and Recent Highlights

In Q1 FY26 (ending April 2025), Walmart delivered solid results despite economic pressures. Net sales reached approximately $108.7 billion (though full-year context shows robust growth), with adjusted EPS of around $0.61, beating estimates by $0.03. Comparable U.S. sales grew 3.8%, driven by e-commerce up 22% and grocery dominance. Internationally, sales surged 10.7%, bolstered by Flipkart and Sam's Club.

Membership at Sam’s Club grew 13%, and advertising revenue increased 24% — key wins for the However, net income dipped to $4.49 billion from $5.10 billion YoY due to higher costs. Walmart raised FY25 guidance, expecting net sales growth of 3.75%-4.75% and adjusted operating income up 6.5%-8%.

Analyst Expectations for Q2 2025

Wall Street anticipates another beat. Consensus EPS is $0.72, a 7.5% YoY increase, with revenue at $175.51 billion, up about 5%. Analysts like those at RBC expect Walmart to outperform, citing strong grocery and value positioning amid inflation.

June and Q2 retail data show consumer demand up 4.1% YoY, supporting Walmart's outlook.

Key Metrics to Watch and Actionable Advice

Focus on:

• Comparable Sales: Expect 4-5% growth, fueled by back-to-school and e-commerce.
• E-commerce and Advertising: Digital sales could top 20% growth.
• Q1 gross margin improved to 24.5%; momentum will hinge on sustaining these gains.

Actionable tip: If Walmart beats on EPS and raises guidance, consider buying shares for long-term hold—its dividend yield is around 1.2%, and stock is up 11.7% YTD. For options traders, straddle strategies could capitalize on post-earnings volatility.

Link to our guide: Investing in Walmart Stock: Strategies for 2025. External: Walmart Investor Relations here.

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Target Earnings Preview: Navigating Challenges in Discretionary Spending

Target (TGT) shares the spotlight on Wednesday, August 20, 2025. Target’s results, driven by apparel and home goods, will spotlight discretionary spending patterns.

Past Performance and Recent Highlights

Q1 2025 was mixed: Revenue hit $23.85 billion, below $24.27 billion expected, with adjusted EPS at $1.30 vs. $1.61 forecast. While GAAP EPS was $2.27, comparable sales fell 3.7%, highlighting weakness in beauty and home. Bright spots? Digital sales grew 1.4%, and Target Circle membership surged.

Executives clipped FY25 outlook, expecting declining sales and lower EPS due to tariffs and consumer caution.

Analyst Expectations for Q2 2025

Expectations are tempered: EPS at $2.00, down from $2.57 YoY, with revenue around $25 billion, implying a decline. Analysts predict 'Other Revenue' at $42.73 million, down 2.9%. RBC sees a potential miss.

Back-to-school could provide a lift, with parents budgeting 17.3% more this year.

Key Metrics to Watch and Actionable Advice

Monitor:

• Comparable Sales: Forecasted flat to down 2%; apparel and essentials key.
• Margins: Operating margin was 5.3% in Q1; improvements via inventory control.
• Digital Growth: Circle Week success could boost.

Advice: If Target surprises positively on comp sales, it might rally—stock down YTD. Short-term, avoid if misses; long-term, buy on dips for 3.2% dividend. Options: Put protection.

Related: Target vs. Walmart: Which Retail Stock to Buy?. External: Target Investors here.

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Home Depot Earnings Preview: Housing Headwinds vs. Renovation Resilience

Home Depot (HD) reports earnings Tuesday, August 19, 2025. As the top home improvement chain, its report will gauge housing-related spending.

Past Performance and Recent Highlights

Q1 fiscal 2025 shone: Sales $39.9 billion, up 9.4% YoY; net earnings $3.4 billion ($3.45/share); adjusted EPS $3.56. Comparable sales dipped 0.5%, but Pro segment (contractors) grew. Customer transactions up 3.2%.

Analyst Expectations for Q2 2025

EPS $4.71, up slightly; revenue $45.4 billion, +5%. Truist is bullish, raising PT on expected beats.

Housing market frozen, but renovations up 3.4% to $594 billion projected for 2025.

Key Metrics to Watch and Actionable Advice

• Comp Sales: Expect 5.2% growth.
• Pro vs. DIY: Pro sales key amid building up 29% supply.
• Margins: Watch for cost pressures.

Tip: Positive guidance could lift stock; pair with Lowe's for sector play. Dividend 2.5%.

Link: Home Improvement Stocks in 2025. External: HD IR here.

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Lowe's Earnings Preview: Competing in a Tough Home Market

Lowe's (LOW) reports Wednesday, August 20, 2025, often compared to Home Depot.

Past Performance and Recent Highlights

Q1 2025: Sales $20.93 billion; EPS $2.92 vs. $2.88 expected. Comp sales down 1.7%; gross margin up 19 bps to 33.4%. Appliances share up 1.2 ppt.

Analyst Expectations for Q2 2025

EPS $4.24, down YoY; revenue $23.99 billion, +1.7%. Mixed outlook due to housing drag.

Key Metrics to Watch and Actionable Advice

• Comp Sales: Down 16.7% expected? Wait, Zacks says EPS down 16.7%, but sales up.
• Store Count: To 1,752.
• Pro Focus: Growth area.

Advice: If beats, buy for recovery; dividend 1.8%.

Related: Lowe's vs. Home Depot Analysis. External: Lowe's Newsroom here.

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Comparative Analysis: How These Retailers Stack Up