Looking at tariff cost push forward to consumers in Walmart earnings, says Mizuho's David Bellinger

Retail Sector Performance & Outlook - The retail sector, as tracked by an unspecified index, is up nearly 20% this year [1] - Investors are focusing on retailers' commentary on consumer behavior and the impact of tariffs [1] - E-commerce and grocery businesses are contributing to Walmart's performance, with shares up over 10% this year, while Target, more focused on discretionary items, has dropped nearly 24% [1] Walmart Analysis - Mizuho expects Walmart to report strong same-store sales growth in the US, around 4% [3] - The primary focus for Walmart's report is the potential impact of tariffs on consumers at the start of Q3 [3] - There are concerns about the consumer's willingness to absorb price increases due to tariffs, but so far, it seems manageable [3] - Tariff-related noise may affect Walmart's gross margins due to accounting methods [4] - Further details on Walmart's AI agent investment are desired, as it could drive the next wave of e-commerce growth [4][5] Target Analysis - There's investor dissatisfaction with Target's trajectory and management decisions [6] - The partnership with Ulta is ending unexpectedly, despite previous reports of strong beauty sales (up 7% year-over-year) [6] - Target experienced negative sales growth in the beauty category last quarter, potentially due to competition from Walmart and issues related to Ulta's new CEO [7] - Messy store operations at Target may be a factor in the Ulta partnership ending [8] - A survey indicated that 96% of investors prefer an outside hire as the new CEO for Target, seeking fresh perspectives and significant changes [8] - Brian Cornell's contract extension and retirement age are also factors influencing the CEO situation at Target [9][10] Home Depot & Lowe's Analysis - Home Depot previously stated its intention to generally avoid raising prices despite tariffs, utilizing roam accounting and a portfolio approach [11] - The spring season was not strong, and price increases are being phased in, impacting later stages of the quarter [12][13] - The market is currently more focused on potential rate cuts than Q2 performance, leading to Home Depot and Lowe's outperforming this week [13]