Walmart and Target closed their recent earnings calls on sharply different footings, but with a surprisingly shared vision for the immediate future.

Walmart delivered another year of broad-based growth and market share gains, while Target spent most of its call outlining a multiyear reset amid uneven discretionary demand and weakening consumer sentiment.

• Walmart Inc.'s US retail ecommerce sales, which includes products or services sold on walmart.com and samsclub.com, will grow 21.6% this year to reach $122.90 billion, according to EMARKETER's October 2025 forecast.
• We forecast Target US retail ecommerce sales will grow 2.7% this year to $20.22 billion.

Despite the performance gap, both companies seem to be converging on the same strategic imperatives: Extreme convenience, AI-driven operations, revitalized merchandising authority, and aggressive reinvestment in stores and supply chain.

A tale of two retailers

Walmart’s year can best be summarized as stable strength.

"We finished the year with another quarter of strong results," said Doug McMillon, Walmart's president and CEO, on their earnings call. "As we look at our results for the quarter and the year, we're pleased to see, first, a healthy top line. We're strengthening our ability to serve people how they want to be served in the moment. That's what's driving our growth."

• McMillon will retire at the end of January, Walmart announced this month, and President and CEO of Walmart US John Furner will succeed him.

Target, in contrast, emphasized discipline and recovery rather than expansion on their earnings call.

"Our business has not been performing up to its potential over the last few years," said Target CEO Brian Cornell. "The team is working quickly to get the company back to profitable growth. While we're not there yet, I'm confident we're on the right path."

For Target, company leaders identified the consumer mood as playing a defining role for their current state of business.

"As we approach the holidays, we know consumers remain cautious," said Target's chief commercial officer Rick Gomez on the call. "Sentiment is at a three-year low amid concerns about jobs, affordability, and tariffs."

While Walmart benefits from consistent cross-income traffic, grocery leadership, and value perception, Target faces a more cautious consumer in discretionary categories, which historically differentiate the brand.

Battleground AI

AI’s role in retail has officially shifted from pilot projects to operating architecture, another area where strategies converge even as starting points diverge.

On their call, Walmart touted deploying AI to accelerate decision-making and operational accuracy.

"The progress we've made over the years with technology has put us in a position to leverage today's fast-moving capabilities closer to real-time," said McMillion, where he highlighted a new AI agent geared towards their merchants and coding assistants that have saved them "about 4 million developer hours."

Target, meanwhile, is using AI to rebuild its merchandising authority.Target chief operating officer Michael Fiddelke described how merchants can now instantly access trend insights.

"We're enhancing our capabilities by equipping our teams with new tools that provide them with AI-enabled consumer insights at their fingertips," he said. "By leveraging AI to capture color, material, style, and product details, and applying consumer research and our brand principles, we can deliver unique and on-trend products to our guests faster than ever before."

Target’s AI approach even extends to pretesting assortments, Fiddelke said, using “synthetic audiences, AI-driven models that simulate real consumer populations.”

Merchandising authority is the strategic center

Though Walmart and Target emphasized merchandising for different reasons, the goal is the same: Stronger, more differentiated assortment.

For Walmart, recent results show progress with McMillon emphasizing renewed strength in discretionary categories.

"Customers are shopping with us more often and buying more items, including in general merchandise categories," he said.

And Walmart CFO John David Rainey linked that strength directly to marketplace expansion, noting that categories like home, automotive, and seasonal “all grew more than 20%.”

Target’s merchandising narrative is more existential.

"Offering an assortment that's distinctly ours is essential to maintaining our merchandising authority,” said Fiddelke. "We must solidify our design-led merchandising authority, leading with incredible product in a way that is distinctly Target… We need to offer a more consistently elevated experience across our stores and digital platforms."

Walmart is poised to exit 2025 with momentum, share gains, and a diversified profit engine, while Target is in a rebuilding posture with accelerating proof points in speed, assortment, and AI-enabled merchandising.

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