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Walmart and Target’s quarterly results lay bare the retailers’ stark differences



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Getty ImagesWalmart’s stock surged this week. Target’s shares plunged.The rival big-box players are both known for selling an array of products including food, clothing, home goods and kitchen appliances. Both their CEOs — Walmart’s Doug McMillon and Target’s Brian Cornell — stepped into their roles in 2014.related investing newsBut the retailers issued starkly divergent outlooks this week that underscored their differences, most notably in how much each relies on grocery sales.On Tuesday, Walmart raised its financial outlook for the year after U.S. same-store sales in the third quarter rose 8.2% from a year ago when excluding fuel. A day later, Target slashed its forecast for the holiday quarter after comparable sales rose just 2.7%, with executives noting weakening trends heading into the season.Here’s a rundown of four key factors that help explain the split in the earnings results:Grocery routine vs. Occasional stopWalmart gets a far bigger share of its sales from groceries than Target, which is helping it draw shoppers looking to save money as inflation squeezes budgets.Groceries account for 56% of Walmart’s annual revenue, compared with about 20% at Target, according to company filings. Walmart is the country’s largest grocer by revenue.Target also sells groceries, but it doesn’t have the same breadth of offerings. For example, stores sell eggs, milk, fruits and vegetables, but do not have full-service bakeries, meat and seafood counters or delis where shoppers can get freshly sliced turkey and cheese.More customers turn to Walmart to fill out the bulk of their grocery lists, said Neil Saunders, managing director of retail advisory firm GlobalData.By contrast, shoppers tend to go to Target more for “top-up shopping” — grabbing a few food items when making a run for ano …

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