Retail Sector Earnings in Focus

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

Total earnings for the 453 S&P 500 members that have reported Q4 results are up +12.2% from the same period last year on +8.7% higher revenues, with 75.1% beating EPS estimates and 73.1% beating revenue estimates.

The Q4 earnings growth pace and EPS beats percentage for this group of 453 index members are tracking below what we had seen from this same group of companies in the preceding period, with the EPS beats percentage also tracking below the 20-quarter average for this group of companies.

The revenue growth pace for this group of 453 index members represents a clear acceleration relative to other recent periods. The Q4 revenue beats percentage is tracking below the preceding period but is otherwise tracking above the 20-quarter average for this group of companies.

Combining the actual results that have come out with estimates for the still-to-come companies, total Q4 earnings are currently expected to be up +13.2% from the same period last year on +9.2% higher revenues. This will be the 10^th consecutive quarter of positive earnings growth for the index.

Retail Earnings – Walmart, Home Depot, & Amazon

Walmart WMT shares were down following quarterly results, with the company’s underwhelming guidance as the catalyst. But more than the company’s guidance, the post-release weakness in Walmart shares appears more as a sell-the-news type of development. After all, Walmart shares are up in excess of +13% since the start of 2026, handily outperforming the broader market’s +0.4% gain. Over the past year, Walmart shares are up +30.9%, handily outperforming the S&P 500 index’s +18.5% gain.

Walmart is enjoying strong momentum in its business, with growth in ecommerce and ‘adjacent’ new businesses like advertising, marketplace, and third-party fulfillment driving results. Same-store sales for the U.S. business (excluding fuel) increased +4.6% relative to consensus estimates of +4.24%, with U.S. ecommerce up +27% from the same period last year.

SleepLean – Improve Sleep & Support Healthy Weight

Walmart’s ecommerce business now accounts for roughly 18% of its total revenues, with the company’s U.S. ecommerce unit now fully profitable. Importantly, the business’s growing scale is helping open up ‘adjacent’ opportunities, such as advertising, that offer much higher margins. Walmart brought in +46% more in advertising revenues in the just-completed fiscal year, totaling $6.4 billion.

Home Depot HD beat estimates and reaffirmed guidance that it had provided at its December 2025 investor meeting. While the company is executing well, the overall home improvement space remains challenging, reflecting a combination of high home prices and mortgage rates. Uncertainty about the timing of demand normalization in the post-COVID period has been another headwind for Home Depot and others in the space. Home Depot’s guidance for 2026 reflects a stable demand backdrop, though housing optimists expect trends to start improving in the coming months.

Home Depot’s same-store sales (comps) increased +0.4% for the quarter, beating estimates of a -0.24% decline and a +0.8% gain in the year-earlier period. Comps had missed estimates in the preceding period, when it had reported +0.2% growth relative to expectations of +1.25% growth.

Looking at the Retail sector scorecard, we now have Q4 results from 22 of the 30 Retail sector companies in the S&P 500 index. Please note that the Zacks Retail sector not only includes ‘traditional’ operators like Walmart and Home Depot, but also digital players like Amazon AMZN and restaurant operators.

For the 22 Zacks Retail sector companies that have reported Q4 results, total earnings are up +6.9% from the same period last year on +8.6% higher revenues, with 50% beating EPS estimates and 77.3% beating revenue estimates.

The comparison charts below put the Q4 EPS and revenue beats percentages for the large-cap index in a historical context.