When Walmart and Target report their holiday earnings this quarter, nobody’s really going to care much about how many sweaters they sold in December. The real story? Two brand new CEOs walking into very different situations, and the American consumer caught somewhere between willing to spend and scared to overspend.
Both retailers swapped out their top executives on February 1st. John Furner took the wheel at Walmart, Michael Fiddelke grabbed the reins at Target. They’re both company veterans who climbed the ladder the old-fashioned way. But that’s pretty much where the similarities end.
The stock performance tells you everything you need to know about the challenge ahead. Walmart’s up 163% over five years and just hit a 52-week high. Target’s down 40% in that same timeframe and dropped another 9% in the past year alone. Ouch.
One Captain Gets a Cruise Ship, The Other Gets a Lifeboat
Walmart’s John Furner basically inherited a well-oiled machine that’s firing on all cylinders. The company just crossed the trillion-dollar market cap threshold in early February. They even switched their stock listing from the NYSE to the Nasdaq, basically saying “hey, we’re a tech company now” to anyone paying attention.
And honestly? They kind of are. Walmart’s been aggressively pushing into AI and digital commerce in ways that would make Amazon sweat a little. They’ve cut deals with both ChatGPT and Google’s Gemini to make shopping easier. Their e-commerce business posted its first profitable quarter globally back in May. Home deliveries are growing, the ads business is printing money, and their third-party marketplace keeps expanding.
Neil Saunders from GlobalData put it perfectly: Furner’s job is to “keep the ship steady and see what he can do to add to the speed.” Not a bad problem to have.
Target’s Fiddelke, on the other hand, has to sell people on a turnaround story after four years of basically flat sales. He’s got declining store traffic, customer complaints about messy stores, and political controversies that have alienated chunks of their customer base. The company laid off 1,800 corporate workers last year, their first major cut in a decade.
The AI Race Nobody’s Really Talking About
Here’s something wild to consider. When Walmart reports earnings Thursday, we might be witnessing a symbolic shift in retail power. Amazon could officially become the largest retailer by annual revenue for the first time ever. Sure, Amazon makes tons of money from cloud computing and ads, so it’s not exactly apples to apples. But symbolically? It matters.
Walmart’s been fighting back by using its massive store footprint as a weapon. Those locations aren’t just places to buy stuff anymore, they’re fulfillment centers for online orders, grocery pickup spots, and delivery hubs. Amazon tried to bolt on grocery stores with Amazon Fresh and Go, but just announced they’re shuttering most of them and converting some to Whole Foods. That strategy clearly didn’t work.
The technology battle between these giants is fascinating because it’s not just about having the best app or the fastest delivery. It’s about fundamentally reimagining what retail even means. Furner sent a memo to employees talking about how AI is “helping reduce friction in our work, simplify decisions, improve inventory flow.” That’s not marketing speak, that’s the future of how these massive operations will actually function.
Target’s Comeback Playbook Starts Now
Target’s earnings call on March 3rd is going to be must-watch TV for retail nerds. Fiddelke’s already making moves. He announced more store staffing last week, though suspiciously didn’t say how much they’re actually investing. He’s cutting 500 roles at distribution centers and regional offices. Mixed signals, much?
The leadership shakeup tells you where Target thinks the problem is. They brought back a chief merchant role and Cara Sylvester is now running merchandising. Rick Gomez, who’d been there over a decade as Chief Commercial Officer, is out. Jill Sando is retiring. That’s a lot of change in a short time.
Target also just opened a concept store in SoHo that’s heavily focused on fashion. It’s a one-off for now, but if you read between the lines, Target’s betting that better, more distinctive products are the way out of this mess. They can’t out-Walmart Walmart on price and convenience. They need to be the place people actually want to shop, not just where they end up because it’s cheap.
Goldman Sachs analyst Kate McShane pointed out that Walmart pursued a “much more aggressive digital agenda” with omnichannel, automation, and marketplace growth. Target’s lagging badly there. But she also noted Target doesn’t want to be Amazon or Walmart. “They have to figure out who they want to be and how to compete.”
That’s the billion-dollar question, isn’t it? In Fiddelke’s first email to staff, he laid out four priorities: sharper merchandising, better customer experience, faster technology adoption, and stronger workforce relations. All good stuff. But execution is everything, and Target’s been promising turnarounds before.
The Consumer Caught in the Middle
Both companies are dealing with American shoppers who are still spending but increasingly picky about where those dollars go. Inflation hasn’t disappeared, tariffs are making things cost more, and people are thinking twice about buying stuff they don’t absolutely need. Walmart’s winning with these consumers because they’ve positioned themselves as the everything store that also happens to be cheap. Target’s struggling because their value proposition has gotten muddier.
Walmart expects full-year sales to rise between 4.8% and 5.1%. Target’s looking at a full-year sales decline. Those numbers tell you everything about momentum and where investor confidence sits right now.
The retail analyst from Jefferies said Walmart investors “want more of the same” while Target’s upcoming investor event is “a chance for them to essentially communicate to everybody and say ‘We hear what you want. Here’s how we are going to deliver on it.’” One CEO gets to run the playbook that’s working, the other has to convince people he’s got answers to problems that have been festering for years.
Furner’s in his second week and already talking about unlocking “new ways to bring our people-led, tech-powered vision to life.” Fiddelke’s talking about getting back to what Target was before. One’s looking forward, one’s looking backward, and the market’s going to decide pretty quickly which approach it believes in more.
