Retail Titans Gear Up for Earnings Season: The New Yorker Buzz

Amazon’s about to step into the spotlight, kicking off the earnings season for the big leagues. Expectations are sky-high, especially after last season’s spending spree.

Welcome to the Show: Amazon’s Big Reveal

Amazon’s the king of the hill, isn’t it? They’re set to drop their fourth-quarter earning numbers soon. The spotlight’s on them because when the bell rings Thursday, they’ll be the first major retailer to divulge their holiday performance.

Following closely behind, Walmart’s waiting in the wings with a reveal on February 20. And don’t worry, Costco and Target fans, your turn’s right around the corner in early March.

Retail giants like Amazon (check their stock status here) seem poised to report a fabulous run during the last holiday season. Indeed, it was a record-breaking holiday shopping extravaganza that exceeded all expectations. December was lit, right?

Consumers: The Unsung Heroes

Here’s the skinny from the horse’s mouth: Consumers are still all in, according to Mastercard’s CEO, Michael Miebach. During a recent earnings call, he sang the praises of engaged consumers backed by a sturdy labor market. This uptick isn’t accidental; it’s a well-oiled consumer machine. Affluence may lift some, but for many others, it’s the job market that’s still the real MVP.

Expect robust sales figures, my friends. Tariffs and stock volatility? Yep, they could muddy the waters later on. But just how much of a fly in the ointment could they be?

What Analysts Have on Their Radar

The Retail Giants in Numbers

Analysts are sharp, and here’s what they see: Amazon, Walmart, and Costco account for an astounding slice of the retail growth pie – a hefty 40-50%. This, by the way, excludes autos. Feels like every American has a warehouse club card, right?

Table: Estimated Growth Projections

Have you noticed how people are obsessed with online shopping? It’s hardly surprising. Who doesn’t love a good deal at their fingertips! Amazon set records during holiday sales last year, and it looks like they’re gunning for a 10% surge in the value of goods sold this year.

The Ever-Evolving Retail Landscape

Walmart’s flexing its muscles too. Thanks to supercharged delivery services, Walmart’s becoming the darling of high-income shoppers. Its appeal to bargain-hunters remains solid, and convenient delivery options are attracting an upscale crowd. UBS analysts reckon it’s looking at a 2-4% increase in year-over-year same-store sales for 2025.

And let’s not forget about thriving e-commerce at Costco. Their long-time focus on value hits home with consumers, and it’s working wonders. Costco could grow by 3.8-5.8% in same-store sales this year.

Discounts and Challenges at Target

Discounts are the name of the game for Target. However, consumer pullbacks present a unique set of challenges. With fewer essentials stocked, Target might struggle more than its peers. Still, the replacement cycle for discretionary items is in Target’s favor.

Spenders Keep Spending: The Drivers

Predictions have consumers spending 2.5% more in 2025, after a 2% uptick last year. UBS says we’re in prime conditions for strong consumer behavior. With inflation cooling and stocks recouping value, there’s a lot of room for growth.

UBS analysts say tax cuts, slashing government expenditure, and deregulation could put the economy on steroids. This could mean a windfall for apparel and shoe sales, among others. But let’s not count our chickens before they hatch.

Potential Pitfalls: Tariffs and Market Hiccups

Tariffs slapped on imports from the likes of China and Mexico could stir the pot. Morgan Stanley suggests these tariffs could add to inflation, affecting consumer sentiment. It might cut spending growth by half, warns the financial giant.

Deutsche Bank also sees a possible stock market correction as another fly in the ointment. Equity appreciation drove much of the spending growth last year. And should it reverse? Well, we could be in for a bumpy ride.

Stay tuned for the drama to unfold as these retail titans reveal what the future holds.