Hits and misses from Q1 earnings season

Earnings // May 23, 2026 Hits and misses from Q1 earnings season By Melissa Daniels Subscribe: Apple Podcasts • Spotify Late May saw a slew of first-quarter earnings reports that reflected meaningful growth for companies like Target and Walmart, but also revealed some bigger shifts in consumer behavior and operational costs.

While shoppers dealing with higher fuel costs are pulling back in some areas, like DIY home projects, they’re also showing up to treat themselves for limited-edition collabs or deals at off-price retailers.

This week on the Modern Retail Podcast, special projects editor Melissa Daniels is joined by reporter Mitchell Parton to unpack some of the biggest hits and misses of earnings season. HIT: Target’s comeback Target’s turnaround plan is finally showing signs of paying off, as its first-quarter earnings showed a net sales increase of 6. 7%.

It was a big shift from six consecutive quarters of decline, with new CEO Michael Fiddelke crediting some of the growth to a new focus on serving busy families and improving merchandising. Parton and Daniels explain why one of the bright spots has been collaborations with the likes of Roller Rabbit, Parke and Pokémon, which drove in-store traffic.

Digital sales were also strong, though, with 8. 9% year-over-year growth, led by more than 27% growth in same-day delivery.

The challenge moving forward will be maintaining that momentum, and also sustaining growth in non-merchandise sales areas like its retail media network, Roundel, and its loyalty and membership programs, Target Circle 360 and Target Plus.

MISS: Rising fuel costs potentially affecting pricing Walmart posted strong first-quarter earnings, but also suggested challenging times ahead due to higher fuel prices.

The retailer itself absorbed approximately $175 million in higher-than-planned fuel costs in its global distribution and fulfillment operations, while it’s seeing shoppers at its gas station fill up less. In turn, executives warned that price increases may be coming down the pike.

But as Parton explained, the retailer has a strong base of revenue in non-merchandise categories like its global advertising business, which is up 37%. HIT: TJX and the popularity of off-price A continued standout during earnings season, TJX posted net sales of $14. 3 billion, an increase of 9% over the prior first quarter.

Ernie Herman, TJX’s CEO and president, pointed to a strong assortment of on-trend goods and the strength of its buying network. “Going forward, we are convinced that the flexibility and resiliency of our off-price business model will continue to be a tremendous advantage.”

Daniels said the growth is due in large part to the “treasure hunt” experience of TJX stores like Marshalls and HomeGoods, which lures in budget-conscious shoppers looking to score a deal. The chain has also invested in payroll to provide an efficient checkout experience.

MISS: Continued softness in the home improvement space The stalled housing market continues to have a big effect on home improvement retailers like The Home Depot and Lowe’s. Both posted comp sales of under 1%. One of the biggest drawbacks they’re facing is a decline in the number of DIY projects people are taking on as they watch their budgets.

“While DIY demand remains under pressure, we’re continuing to grow market share in a challenging housing environment shaped by elevated interest rates, higher costs and low housing turnover,” Lowe’s CEO Marvin Ellison said on Wednesday’s earnings call.