Walmart and Target Benefits highlight new CEOs Furner and Fiddelke

When Walmart And Target If investors report holiday results this quarter, investors could quickly ignore these results.

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

Both companies have seen leadership changes this month: Walmart CEO John Furner and Target CEO Michael Fiddelke, both longtime members of the company, took over on February 1.

Competing retailers faced the same economic challenges. U.S. consumers continue to spend, but they are buying selectively as inflation and tariffs fuel rising prices for groceries and other essentials and cause some shoppers to think twice about making discretionary purchases.

Yet even though Walmart and Target both have new CEOs, their prospects for the future look markedly different.

Walmart shares have soared about 163% over the past five years and about 24% over the past year as of market close Tuesday. It hit a 52-week high on Tuesday. Target shares, on the other hand, have fallen about 40% over the past five years and 10% over the past year.

The stock market performance of retailers reflects their strong divergences in sales results. Walmart attracts shoppers based on income and is growing through online sales and higher-margin activities like advertising. Target is struggling with slower sales and lower store traffic. Walmart expects its full-year net sales to increase 4.8% to 5.1%. Target, on the other hand, is on track for a decline in sales for the full year.

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

“In many ways, his job is to keep the ship steady and see what he can do to increase the speed,” he said.

On the other hand, Target CEO Michael Fiddelke needs to “sell the Target of the future” after four years of roughly flat annual sales, Saunders said.

“What I think he’ll want to do is inject a little bit of enthusiasm, saying, ‘Look, I’m really excited about this role. I’m really excited about where Target could go. We’re going to change things. We’re going to become a different company. We’re going to go back to what we were before,'” he said.

Here’s a closer look at what we know so far about the CEOs’ plans and what investors will be listening for when the results are released:

Walmart will report its fourth-quarter financial results before the bell on Thursday.

The retail giant has had a busy few months: in addition to having a new CEO, Walmart’s market capitalization surpassed $1 trillion in early February. The company also moved its listing from the New York Stock Exchange to the tech-heavy Nasdaq in December and was added to the Nasdaq 100 in January, signaling its aim to be seen by investors more like its main rival Amazon.

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

Walmart announced deals with two leading AI chatbot platforms, OpenAI’s ChatGPT and Google’s Gemini, to make it easier for shoppers to find and purchase its products.

Furner, who like his predecessor rose through the ranks at Walmart for decades at the Arkansas-based company, oversaw the company’s largest segment in his previous role as Walmart’s U.S. CEO. Furner was chosen in part because of his success in growing Walmart’s digital business, a critical part of its future, said Kate McShane, a retail analyst at Goldman Sachs.

Walmart reported its first profitable quarter for its U.S. and global e-commerce business in May, as its home deliveries, advertising business and third-party marketplace expand.

Corey Tarlowe, a retail analyst at Jefferies, said Walmart investors “still want the same thing” — more gains in e-commerce, success in grocery and market share gains among a wider range of customers, including more affluent shoppers.

Still, Walmart’s holiday quarter results could mark an inflection point in the retail world. Amazon could become the largest retailer by annual revenue for the first time, even though the company makes much of its money from technology services such as cloud computing and advertising.

Saunders said the comparison is not apples to apples, but is “symbolically important” as both competitors attempt to outdo each other. Walmart has grown in part by relying on stores to deliver groceries and offer pickup for online orders. Amazon, which recently announced it would close its Amazon Fresh and Go stores and turn some into Whole Foods stores, had been trying to add fresh produce to its huge volume of online orders, he said.

As the nation’s largest grocer by revenue, Walmart is also battling the expansion of privately held discounter Aldi and could feel pressure from the supermarket operator. Krogerwhich recently 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 will be shaped by his more than 32 years at Walmart, adding that he believes the company “is well-positioned to lead in this next era of retail.”

“This next era will pave the way for new ways to bring our people- and technology-driven vision to life,” he said in the memo. “By leveraging our global scale, we can better serve our customers and members with speed, reliability and enhanced experiences, no matter where they choose to shop with us.” »

He said this strategy is already coming to life as “technology and AI help reduce friction in our work, simplify decisions, improve inventory flow and free up time so you can focus on what matters most: serving customers, members and each other.”

For Fiddelke, Target’s earnings report could be the most in-depth look yet at the cheap-chic discounter’s road map to return to growth.

The company is looking to make a comeback and plans to share its holiday quarter results and expectations for the current fiscal year on March 3 during a financial meeting at its Minneapolis headquarters.

The big-box retailer has faced a long list of challenges, including declining visits to its stores and website, customer complaints about the condition of stores and backlash over the company’s political and social stances, such as its backtracking on its commitments to diversity, equity and inclusion and its decision not to publicly oppose rising immigration enforcement in its hometown.

As sales decline, Target has reduced its workforce. Last year, the company cut 1,800 positions across the company, marking its first major layoffs in a decade.

Target’s earnings report is more anticipated than Walmart’s because there are many questions about its turnaround strategy and how long it might take, said McShane of Goldman Sachs. Investors debated how much the company might need to invest in merchandising, marketing and store labor to increase sales.

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

She added that while Target doesn’t want to be Amazon or Walmart, “they need to figure out who they want to be and how to compete.”

Fiddelke has already sent signals that he is making changes. Last week, he announced in an email to employees that the company would increase store staffing, although Fiddelke and the company declined to say how much they would invest in overtime for employees. It also cuts about 500 positions in distribution centers and regional offices.

Fiddelke shook up Target’s management team starting Sunday, bringing back the role of chief retailer and announcing a high-profile departure. Cara Sylvester, formerly chief customer experience officer, became Target’s chief merchandising officer, and Lisa Roath, formerly chief merchandising officer of food, essentials and beauty, succeeded Fiddelke as chief operating officer.

At the same time, chief commercial officer Rick Gomez is leaving the company after more than a decade, and Jill Sando, director of merchandising for Fun101’s clothing and accessories, home and toys and entertainment division, will retire.

Target also opened a new concept store in New York’s SoHo district. While the location is one of a kind, the emphasis on fashion could inspire more changes at stores across the country and in the suburbs, McShane said.

This desire to offer more efficient products constitutes a major element of Fiddelke’s strategy. In an email to employees and customers during his first week, Fiddelke outlined four priorities: refining Target’s merchandising, improving the customer experience, accelerating technology and strengthening the company’s workforce and its surrounding communities.

Jefferies’ Tarlowe said Target’s upcoming investor event is “an opportunity for them to basically communicate with everyone and say, ‘We hear what you want. Here’s how we’re going to make it happen.'”

“Change is happening, the question is whether the market sees it and appreciates it,” he said.

Clarification: This story has been updated to clarify that Walmart moved its listing to Nasdaq in December and was added to the Nasdaq 100 Index in January.