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.<br><br>While shoppers dealing with higher fuel costs are pulling back in some areas, like DIY home projects, they&#x27;re also showing up to treat themselves for limited-edition collabs or deals at off-price retailers.<br><br>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, from Target&#x27;s comeback to the threat of rising fuel prices.

Hits and misses from Q1 earnings season

The Modern Retail Podcast

# Full Transcript

**Podcast:** The Modern Retail Podcast

## Participants

- **Melissa Daniels** (Digiday)
- **Mitchell Parton** (Modern Retail)

## Transcript

Hello and welcome to The Modern Retail Podcast. It's our show that covers the ways the retail industry is changing and modernizing. I'm Special Projects Editor Melissa Daniels. It's been a big week or two for earnings reports with companies like Target, Walmart, Home Depot, TJX and more reporting their first quarter results. We're at this really interesting point where consumer sentiment is hitting all-time lows and as we recently spoke to Carney's Katie Thomas about people are still spending.

They're just spending differently. So if you're a major public retailer right now, you've got to be laser-focused on finding your consumer, keeping your shopper and still finding a way to grow. To help me unpack all of this and go over this week's earnings, I'm joined by Modern Retail reporter Mitchell Parton. Mitchell, how are you doing today? Hey, hi, howdy. I am doing great. How about you? I'm doing great. Thank you so much for making time in your day. How's your Q2 going?

Pretty, pretty busy so far. Lots of retail earnings this week, as we'll talk about in a sec. Yeah, you've had a bunch of stories out of earnings this week showing what strategies are working and not working for some of these companies, the challenges they're facing. So let's just get right into it. I want to talk about some of the sort of hits and misses that we're seeing in these earning reports. The things where, you know, companies are hitting it out of the park and the things that are challenging them right now.

So let's start with arguably the biggest win, which is perhaps an unexpected one, and that's Target's earnings. I don't know if I would call it unexpected that they won. I think they've been... We knew they were making changes. I think it was just a question of how impactful it would be on performance and how soon. And it was... It seemingly has been pretty impactful pretty soon.

We saw like 7% increase in net sales, 4.4% increase in store traffic, they said. So some pretty good stuff in the near term. I think we're going to want to see how this looks a few quarters out. So for anybody not as familiar with Target, Michael Fidelke is their new CEO.

He came in recently to kind of turn around this pretty devastating few years of sales at Target after, you know, there's been things like boycotts. But there's also just been kind of a discretionary spending environment that's not really been in the company's favor.

And a lot of operational mistakes, a lot of people would say, from long lines, empty shelves, a lot of things people are seeing in the stores and on the back end as well. So we're in the beginning of this turnaround job. But things are looking good in the immediate term. Yeah, I think that's a good assessment.

I think I saw somewhere that this was, you know, the first quarter in like a while that they h...

Hits and misses from Q1 earnings season

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Hits and misses from Q1 earnings season

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.