This week is the final exam for the American consumer — and the retail stocks that live or die by their wallets. Target, Best Buy, and Costco all report earnings over the next five days, and the results will tell us whether the “consumer resilience” narrative has any legs left or whether tariff headwinds and cumulative inflation have finally broken the shopper.
Target kicks things off Tuesday morning, and it’s a big one. This is the first full earnings report under new CEO Michael Fiddelke, who takes over a company that’s been Wall Street’s favorite punching bag. Target missed comp expectations last quarter with a -2.7% decline when analysts expected just -1.89%. The stock has been down -8.7% over the past year while Walmart surged 29%. Yet here’s the twist: Target is up 15.6% year-to-date in 2026, outpacing even Walmart’s 15% gain. Analysts expect $2.17 in EPS on $30.52 billion in revenue, with comps still expected to decline 2.48%. The real question isn’t this quarter — it’s whether Fiddelke can sell Wall Street on a turnaround plan at Tuesday’s analyst day.
Best Buy reports the same morning, and the expectations bar is on the floor. The stock has been demolished — down 31.5% over the past year as consumers pulled back on big-ticket electronics. Analysts expect $2.48 EPS on $13.91 billion in revenue, with same-store sales growth of just 0.14%. That’s a steep deceleration from the 2.7% comp growth Best Buy posted last quarter, which actually beat estimates and sent the stock higher. The holiday season was soft for electronics, and the revisions trend has been modestly negative. But at these levels, there may not be much downside left if results come in anywhere near expectations.
Costco rounds out the week on Thursday, and it’s the one retail stock that’s made bears look foolish for years. Higher-income shoppers keep fueling its growth machine, though investors are starting to question when growth hits a ceiling and whether the company is investing enough in digital. A thin miss or soft guidance here could actually move the stock meaningfully given how much optimism is already priced in.
The broader retail earnings picture so far is mixed but revealing. Of the 22 S&P 500 retailers that have reported Q4 results, only 50% beat EPS estimates — the lowest hit rate in five years and the worst of any sector this earnings season. Revenue beats are better at 77.3%, which suggests shoppers are still spending but margins are under pressure. Total retail earnings are up 6.9% year-over-year, but strip out Amazon and the picture gets muddier.
What’s really happening beneath the surface is a tale of two consumers. High-income households are spending freely — hence Costco and Walmart’s strength. Lower-income shoppers are buckling under cumulative inflation, and they’re cutting discretionary purchases first. That’s exactly where Target and Best Buy live. Tariff uncertainty is adding another layer of fog: retailers can’t price forward inventory when import costs might spike overnight.
For traders, this week is about positioning. Target and Best Buy are the contrarian plays — beaten down, low expectations, potential catalyst in any positive surprise. Costco is the momentum play — expensive but hard to bet against. One thing is certain: by Friday, we’ll know whether the American consumer is still standing or just running on fumes.