Walmart and Target are seeing a curious phenomenon in earnings this week—and their stock is feeling the impact

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Walmart vs. Target: Two Retail Giants, Two Opposite Earnings Stories—And What It Means for Q2

It’s rare to see two of America’s largest retailers report earnings in the same week and deliver polar opposite market reactions. But that’s exactly what happened this week, as Walmart and Target each unveiled their Q1 FY27 results. The headline? Walmart beat expectations on revenue and earnings, yet its stock tanked. Target, on the other hand, is riding a wave of momentum, with shares up over 30% since January.

As a former VP of Sales, I’ve seen this pattern before: earnings are not just about what you did last quarter—they’re about what the market thinks you’ll do next. And in this case, the market is pricing in a very different future for each retailer.

Let’s break down the numbers, the narratives, and the actionable lessons for B2B revenue teams watching consumer behavior as a leading indicator.

Walmart’s Q1 FY27 Earnings: The Good, The Bad, and The Guidance

Walmart reported Q1 results for its 2027 fiscal year on Thursday. On the surface, the numbers looked strong:

  • Revenue: $177.75 billion, beating analyst estimates of $174.98 billion
  • Earnings Per Share (EPS): $0.66, topping expectations of $0.65 and up from $0.61 a year ago
  • E-commerce growth: Up 26% year-over-year

By any measure, that’s a solid quarter. So why did Walmart’s stock fall nearly 8% by midday Thursday?

The culprit? Forward guidance.

Walmart CFO John David Rainey told CNBC that while consumer spending held up during Q1—partly due to higher tax refunds—the outlook for Q2 is clouded by soaring gas prices. The U.S. military conflict with Iran has disrupted shipping through the Strait of Hormuz, sending fuel costs sharply higher.

Rainey’s message was clear: low-income Walmart shoppers—the ones most exposed to a K-shaped economy—are already pulling back. And now that tax refund season is winding down, the pressure will intensify.

“Those tax refunds are largely not coming in,” Rainey said. “I think consumers are going to feel more of that pressure from higher fuel prices.”

For B2B sales leaders, this is a textbook case of leading vs. lagging indicators. Walmart’s Q1 was a lagging indicator of past consumer behavior. But the rising gas prices and cautious guidance are leading indicators of a tougher Q2. Investors saw that gap and sold.

Key takeaway for SaaS and tech companies: Don’t let a strong quarter lull you into complacency. If your customers are signaling belt-tightening—whether through lower deal sizes, longer sales cycles, or higher churn—adjust your forecast before the numbers hit your board deck.

Target’s Comeback: From DEI Boycotts to a 30% Stock Surge

While Walmart was dealing with macro headwinds, Target delivered a very different narrative. The Minneapolis-based retailer reported earnings on Wednesday, and the vibes were unmistakably positive.

Target’s stock is up 30.17% year-to-date, outperforming the S&P 500. On Thursday midday, shares were up another 0.13%—a small move, but consistent with a steady upward trend.

This marks a dramatic reversal from a year ago, when Target was struggling under a trifecta of pressures:

  • A cost-of-living crisis squeezing middle-income shoppers
  • Rising tariffs adding to supply chain costs
  • Consumer boycotts following its rollback of DEI initiatives

Fast forward to today, and Target appears to have stabilized—and even regained momentum. While the source material didn’t break down specific Q1 revenue or EPS for Target, the stock trajectory tells the story.

What changed? A few things:

  1. Pricing discipline. Target has managed its inventory better, reducing the need for heavy discounting.
  2. Customer retention. Despite the boycotts, core shoppers came back—or never fully left.
  3. Macro tailwinds. The same tax refund bump that helped Walmart likely helped Target, too.

For B2B teams, Target’s turnaround is a reminder that brand resilience matters. Even in a tough macro environment, customers who feel a genuine connection to your product or service will return. The question is: are you investing in that loyalty before the storm hits, or only after?

Why Gas Prices Are the Silent Killer of Consumer Spending

Both Walmart and Target cited higher fuel costs as a risk factor. But the impact isn’t uniform across their customer bases.

Walmart’s core shopper tends to be lower-income and more price-sensitive. When gas prices spike, these households face an immediate trade-off: fill the tank, or buy groceries. That trade-off directly impacts Walmart’s foot traffic and basket size.

Target’s customer base skews slightly higher income, meaning they have more cushion to absorb fuel price increases. That’s one reason Target’s rebound has been stronger—its shoppers are less exposed to the gas price shock.

For B2B sales leaders, here’s the playbook:

  • Segment your customer base by vulnerability. If you sell to companies in energy-sensitive industries (logistics, manufacturing, retail), monitor fuel prices as a leading indicator of their purchasing power.
  • Adjust your sales motion accordingly. When gas prices rise, expect longer decision cycles. Offer flexible payment terms or value-based pricing to reduce friction.
  • Double down on high-retention segments. Just as Target’s more resilient customers are carrying the company, your most sticky accounts will protect your revenue during downturns.

E-Commerce Growth: The One Bright Spot Both Retailers Share

Despite Walmart’s cautious guidance, one metric stood out: e-commerce growth of 26% year-over-year.

That’s not a surprise. The shift to digital shopping is structural, not cyclical. Even as consumers cut back on discretionary spending, they’re still buying essentials online. Walmart’s omnichannel strategy—buy online, pick up in-store; same-day delivery; subscription-based savings—is paying off.

Target has made similar investments, and its digital channel is likely contributing to its stock rebound as well.

What this means for B2B:

Your buyers are consumers first. They’ve been trained by Amazon, Walmart, and Target to expect frictionless purchasing experiences. If your sales process still involves a 10-page contract, a 30-minute demo, and a week of back-and-forth with procurement, you’re fighting the trend.

  • Embrace self-service. Allow prospects to educate themselves, price out solutions, and even buy basic tiers without talking to a sales rep.
  • Use data to personalize. Just as Walmart targets offers based on past purchases, use intent data and behavioral signals to tailor your outreach.
  • Speed up your sales cycle. The market is rewarding companies that can close deals faster—because speed signals confidence and reduces risk for buyers.

The K-Shaped Economy: Why Low-Income Customers Drive the Narrative

Both retailers are operating in a K-shaped economy, where the top half is thriving and the bottom half is struggling. Walmart’s CFO explicitly referenced this dynamic.

Low-income households are spending less, deferring purchases, and switching to cheaper alternatives. This is hitting Walmart more than Target because Walmart historically serves a larger share of low-income shoppers.

But here’s the twist: even high-income shoppers are feeling the pinch of inflation and gas prices. They’re just slower to change their habits.

For B2B companies, the lesson is to watch your customer segment closely.

  • Are your customers in a K-shaped industry? (e.g., enterprise SaaS vs. SMB tools)
  • Are they showing signs of budget tightening—or accelerating spend?
  • How quickly are they reacting to macro shocks?

If you’re selling to SMBs, you’re likely serving the “bottom half” of the K. Expect longer sales cycles, higher churn, and a need for more value-based messaging. If you’re selling to enterprise, you have more cushion—but don’t get complacent. Enterprise buyers are also making cuts, just more slowly.

What This Earnings Week Tells Us About Q2 2027

Here’s the bottom-line takeaway from this week’s retail earnings:

  1. Strong Q1 doesn’t guarantee a strong Q2. Walmart proved that.
  2. Consumer resilience is real, but fragile. Tax refunds propped up spending, but that’s temporary.
  3. Gas prices are the new inflation. Every revenue team should watch fuel costs as a macro indicator.
  4. E-commerce is non-negotiable. If you haven’t invested in a digital-first sales motion, you’re falling behind.
  5. Brand loyalty matters, but it’s not infinite. Target’s comeback shows that customers will return—if you earn back their trust.

For B2B growth teams, this is a moment to double down on data-driven forecasting. Don’t just look at your own pipeline. Look at what your customers’ customers are doing. If Walmart is signaling a tough Q2, chances are your retail clients are feeling the heat too.

Final Playbook: 3 Actions You Can Take This Week

  1. Audit your customer health scores. Identify accounts that are most vulnerable to a consumer slowdown. Proactively offer solutions, not discounts.
  2. Monitor fuel prices and consumer sentiment. Set up a weekly dashboard that tracks these alongside your sales velocity and churn rates.
  3. Invest in self-service and e-commerce capabilities. If you’re in B2B SaaS, your product-led growth strategy is more important than ever.

Walmart and Target are telling us the same story—just from opposite sides. One is cautious; the other is confident. But both are adapting faster than ever.

The question is: are you?

B2B Pulse is a growth-focused publication for revenue teams at SaaS and tech companies. We turn market signals into sales playbooks. Subscribe to our weekly newsletter for more analysis like this.

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