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There’s nothing better than a good matchup. George Foreman versus Muhammad Ali, milk versus cookies, Star Wars versus the other one that can’t be named.
And that’s exactly what appeared to be happening in the latest batch of earnings reports, which looked like battle royale for big box retailers, with key players facing their competitors. These closely watched reports each offered a look at how cash-strapped consumers are (and aren’t) spending in a darkening economic landscape.
So, who won their apparent matches?
Built different. In one corner, Home Depot. In the other, Lowe's. Both are watched for their proximity to the housing market and homebuilding, neither of which have been doing especially well lately. In August, homebuilder sentiment in the US unexpectedly dipped to its lowest level in over two-and-a-half years.
Home Depot seemed unfazed by the low morale in housing, sticking to its full-year outlook. In its latest earnings report, the company said it still expects full-year total sales to climb by 2.8%.
But is that confidence fully founded? This marks the second straight quarter of earnings misses for the home improvement retailer, and its Q2 2025 report was the first since May 2014 to miss on both earnings and revenue expectations, per CNBC.
But you can see where the optimism is coming from, as the company waits for the tides of home improvement spending to tick up. On the company’s earnings call, CEO Ted Decker noted that “some relief on mortgage rates, in particular, could help.”
The biggest culprit holding consumers back from spending is the elephant in every board room right now.
“The No. 1 reason for deferring the large [home improvement] project is general economic uncertainty,” he said. “That, you know, is larger than prices of projects, of labor availability, all the various things we’ve talked about in the past by a wide margin.”
And those deferred projects have caused Home Depot to change its course on tariff-induced price hikes, with McPhail telling the Wall Street Journal now “there will be some modest price movement for some categories.”
Meanwhile, competitor Lowe’s was largely playing catchup. The company announced a $8.8 billion cash deal to purchase building materials maker Foundation Building Materials; this follows a Home Depot subsidiary’s purchase of a specialty building products distributor for $4.3 billion under two months ago.
Lowe’s reported $2.4 billion in net income, a 0.6% climb from the same time last year. Michael Baker, an analyst at financial services company D.A. Davidson, told Market Watch that Lowe’s showcased plenty of positives in its latest report, especially when it comes to comparable sales growth. Lowe’s bested Home Depot in that category, which he said was the first time that has happened since Q3 2024.
Let’s call this one a tie.
Home goods. There was a more obvious winner in the showdown between Target and Walmart.
Target is officially in its flop era. Its longtime CEO Brian Cornell is stepping down, a widely anticipated move that analysts thought could usher in a fresh, outside voice to the struggling company. Instead, Cornell will be replaced in February 2026 by the company’s COO Michael Fiddelke, who’s been with the company for 20 years.
In its latest earnings report, Target posted sales that marked a third-straight quarter decline. This year, Target’s stock has ranked among the worst performing companies on the S&P 500, per CNN.
With that backdrop, everything that competitor Walmart had to offer looked positively rosy. So, even as the big box retailer missed on quarterly earnings for the first time since May 2022, per CNBC, nothing looked especially troubling.
The company raised its full-year earnings and sales outlooks. On an earnings call, CEO Doug McMillon noted that while lower- and middle-income consumers have turned to cheaper alternatives, the company hasn’t encountered an across-the-board pullback on consumer spending because of tariffs, which have pushed up Walmart’s costs every week.
Even in the best matchups, it’s not always a fair fight.