The Q2 earnings from big-box retailers in the U.S., through July 31, 2025, provide insight into how the Trump administration’s trade war is impacting sourcing, sales and consumer sentiment.
Overall, these retailers report consumers are more selective and value driven across income levels. In some cases, merchants are putting a precedence on promotions and private label, while in others these stores are shuffling assortments and production countries—particularly for discretionary goods. Low costs remained a focus for this group.
While its competitors showed positive gains in the quarter, Target’s revenue lagged behind last year’s performance. Meanwhile, non-merchandise revenue streams for Walmart gave the retailer the ability to hold the line on pricing. That, plus the company’s super-fast delivery options helped give it an edge.
Below, get the details on the revenue and earnings for BJs, Target, Walmart and Costco (which reported Q2 in May).
BJs
| US Revenue | Y0Y % Revenue | YoY % Comparable Sales (Excl gas) | Gross Margin | Earnings Per Share/YoY | YoY Inventory levels | |
| BJs | $5.3B | 3.2% | 2.3% | +10 bps | $1.14 / 4.6% | -2% |
- Digital sales grew by 34% in the quarter, driven by consistently robust BOPIC, same-day delivery expansion and rapidly increasing penetration of Express Pay. BJs reported digital adoption sets new records every quarter with app usage continuing to grow with more than half of active members now regularly using it.
- Guidance: While acknowledging there could be “volatility” in the second half and forecasting is challenging in this environment, the company updated its full year earnings guidance. Comp sales (excluding gas) are expected to be up 2% to 3.5% for the full year. The company updated adjusted earnings per share to $4.20 to $4.35, up from $4.10 to $4.30.
BJs reported a 3.2% YoY revenue increase and comp sales up 2.3% YoY. Perishables, grocery and sundries led Q2 performance with 3% YoY comp growth. The apparel business grew in the low single digits despite unseasonably wet and cold weather at the start of the quarter. Weather dragged Q2 comps down for general merchandise by 2.2%.
Inventory
Inventory levels were down by approximately 2% YoY and down by 6% YoY per club. The decrease is attributed to tighter inventory buys—particularly in general merchandise (GM)—and better inventory allocation. Tariffs have the GM team considering sourcing from different countries.
Pricing
CEO Bob Eddy said, “We’ll continue to do the things that we’ve always done and hold prices as long as we can.” BJs emphasized that it is in a low margin business, and tariffs may raise prices in a considerable way and impact the elasticity of categories.
The company is pulling back on discretionary goods with low margins and high tariff exposure like holiday décor.
Despite the inventory declines, in-stock levels improved by approximately 50 basis points over the same period last year and are at the highest levels seen in some time. Looking at the growth in inventory levels versus net sales since pre-pandemic times, inventories grew approximately 45% with net sales having grown by roughly 60%.
BJs reported inflation up about one point. The company sees an opportunity to grab market share as inflation increases and tariff pressure pushes costs higher at competitors.
Consumer behavior
BJs reported that all consumers are more cautious but fairly resilient in the face of tariffs and inflation. Total spending increased across income levels, with low-income households demonstrating incredible loyalty. However, across the board shoppers used coupons, reacted to deals and looked for private label more than in the past.
Sales of discretionary categories were more impacted than necessities, a trend that continued from Q1.
BJs expects similar consumer behaviors through the end of the year.
Costco
| US Revenue | Y0Y % Revenue | YoY % Comparable Sales (Excl gas) | Gross Margin | Earnings Per Share/YoY | YoY Inventory levels | |
| Costco* | $46.3B | 6.6% | 7.9% | 11.25% +41 bps | $4.28 / 13.2% | +6.75% |
*The reported period is for the quarter ending May 11, 2025.
- Digital comp sales were up 14.8 percent in the quarter
- The company did not provide financial guidance.
Year on year Costco’s revenue increased 6.6% with comp store sales up 7.9% through May 11. Comparable sales excluding gas prices and foreign exchange impacts have trended upward monthly from 5.5% in May, 5.5% in June, to 6.5% in July.
During the quarter, the company extended gas station opening hours and lowered prices on key items such as eggs, butter and olive oil, which helped drive a tailwind in food and sundries. Housewares, home furnishings and jewelry were among the categories that saw double digit increases.
Inventory
Inventory was up 6.75% for the quarter ending May 11. Items imported from China represent about 8% of total U.S. sales, according to the company.
Pricing
The company said price increases are always a last resort. To that end, Costco reported efforts to move sourcing and production, as needed to reduce tariff impacts. Specifically for Kirkland’s Signature product, Costco moved operations closer to consumer markets to boost agility, and even increased sourcing on American-made goods in select categories. The retailer also front-loaded summer goods to mitigate tariff impacts.
Consumer behavior
Traffic was up 5.5% in the U.S, with average tickets up 1.1%.
Target
| US Revenue | Y0Y % Revenue | YoY % Comparable Sales (Excl gas) | Gross Margin | Earnings Per Share/YoY | YoY Inventory levels | |
| Target | $25.2B | (0.9)% | (3.2)% | 29% – 100 bps | $2.05 / (20)% | +2% |
- Michael Fiddelke became Target’s incoming CEO, COO and board member starting fiscal year 2026.
- Digital comparable sales grew 4.3%, reflecting more than 25% growth in same-day delivery powered by Target Circle 360 and continued growth in drive-up.
- The company maintained its full-year guidance of a low-single digit sales decline and GAAP EPS ranging from $8 to $10.
- The company is focusing on key priorities such as reestablishing merchandising authority, enhancing the guest experience and leveraging technology for operational efficiency.
Comparable sales were down 1.9% for the quarter, a nearly two percentage point improvement to Q1. Comp sales improved over the previous quarter across categories, including discretionary business, which was up 400 basis points.
Digital comp sales grew 4.3%. Target marketplace and membership delivered double-digit YoY growth.
Apparel also saw an acceleration driven by women’s denim which saw a 28% comp, driven by new styles, new silhouettes and new washes. Home also picked up, propelled by newness.
In Q2, the company noted one-time tariff-related costs were primarily driven by order cancellation costs, which impacted on the gross margin by 210 bps (in total).
Inventory
Inventory was up 2%, as the company invested in frequency categories. The retailer, which reported it imported 30% of its goods from China as of March 2025, is aiming to reach 25% by the end of the year.
Target said it was well positioned to navigate the tariff situation. To minimize exposure, the company is diversifying production countries, evolving its assortment and negotiating with vendors.
Pricing
Target reported it’s only increasing pricing as a last resort. As inflation continues to impact household spending, the retailer found that consumers have become more selective.
In response, the company continues to lean into its $1, $3 and $5 assortment in the Bulleye’s Playground area and is committed to deals and promotions. Target is looking to private label to “deliver outstanding value, great pricing, great quality, great trend.”
Walmart
| US Revenue | Y0Y % Revenue | YoY % Comparable Sales (Excl gas) | Gross Margin | Earnings Per Share/YoY | YoY Inventory levels | |
| Walmart | $120.9B | 4.8% | 4.6% | 25.2% +4 bps | $0.68 / 1.5% | +2% |
| Sam’s Club | $23.6B | 3.4% | 5.9% | 25.2% +4 bps | $0.68 / 1.5% |
- U.S. ecommerce sales grew 26% YoY; delivery from store grew by 50%
- Speed of delivery resonated with customers; approximately one-third of deliveries from stores were expedited (3 hours or less)
- Guidance: Walmart raised its guidance given the company’s year to date performance and its confidence in its ability to drive share gains in the back half of the year. The company expects net sales growth of 3.75% to 4.75%, up from 3% to 4%. The retailer adjusted EPS to $2.52 to $2.62, up from $2.50 to $2.60. Adjusted operating income guidance remains unchanged from 3.5% to 5.5% on a constant currency basis.
Walmart reported YoY revenue was up 4.8% with comp sales rising 4.6%. The categories of strength were grocery, health and wellness, and general merchandise. General merchandise had low single-digit comps reflecting strength in fashion, media, gaming and auto care.
The company also credited the quarter’s performance on its ability to offer super-fast delivery and robust rollback discounts. Walmart offered over 7,400 rollbacks in-store and online in the quarter, 2,000 more than Q1.
Inventory
Walmart reported a 2% inventory growth. To curtail tailwinds from markdowns and shrinkage, the company is focused on inventory management.
Pricing
The big-box behemoth continues to see costs increase each week due to tariffs, which it expects will continue into the third and fourth quarters. The company reports flexibility in its product mix and capabilities in offering competitive pricing with rollbacks.
Walmart’s scale and revenue from non-merchandise categories like advertising and memberships enables it to determine when and how much to absorb of the tariff costs.
“With regards to U.S. pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do. We’re keeping our prices as low as we can for as long as we can,” said Douglas McMillon, president, CEO and director, Walmart.
Consumer behavior
The company said customers will make trade-offs from one category to another. It’s also found that customers respond positively to value.
Thus far, the retailer said there’s been no dramatic shifts in customer behavior. Given that the tariff impacts have been gradual, Walmart said consumer reaction to tariffs has been muted.
Walmart has gained customers in higher income brackets, and at the same time has continued to maintain and grow other income levels.
Chris Nicholas, president and CEO of Sam’s Club, said that the largest proportion of its members are higher income, and this cohort is growing. He added that the company’s general merchandise business has seen continued growth, adding 50 new brands in Q2, including Vera Bradley, Outdoor Voices and CurrentBody at Sam’s Club, which help to bring in members. He also acknowledged apparel as a category is doing “very well.”
