The week of August 18, 2026 handed investors a wave of retail earnings that looked spectacular on the surface. Walmart (NASDAQ: WMT), Home Depot (NYSE: HD), and Target (NYSE: TGT) all beat Wall Street's expectations. But the real story is more complicated — and understanding it could matter a great deal to anyone holding these stocks heading into fall.
One word explains most of the earnings fireworks: tariffs. Specifically, the unwinding of them.
The IEEPA tariff refunds — government repayments to retailers for duties paid during the trade dispute period — hit all three companies' income statements simultaneously in the July-ending quarter. Home Depot received approximately $730.00 million in tariff refunds. Target booked a $994.00 million pretax benefit, which added $1.65 to its reported earnings per share. Walmart was eligible to receive approximately $2.90 billion in total refunds, with CFO John David Rainey confirming on the company's August 20, 2026 earnings call that just under $100.00 million was still outstanding.
The refunds created unusually large headline numbers that require careful interpretation by investors.
Walmart: A Beat That Sent Shares Down 9%
Walmart reported adjusted earnings of $0.81 per share for its fiscal second quarter ended July 31, 2026, topping the analyst consensus of $0.74 per share by roughly 9.5%. Revenue rose 5.9% year over year to $187.90 billion, beating expectations of $186.77 billion. E-commerce sales jumped 23% globally. U.S. comparable store sales grew 2.6%.
So why did shares fall nearly 9% to approximately $104.00 in premarket trading on August 20, before settling to 102.82 as of August 21? The answer lies in the guidance.
For the third quarter, Walmart projected revenue of approximately $185.60 billion — roughly 1.4% below analyst estimates of $188.30 billion. Adjusted EPS guidance for Q3 came in at $0.62 to $0.64. Management explained that Q3 operating income growth is expected to moderate to 2% to 4% as tariff-related price investments flow through. Higher fuel prices are expected to add more than $2.00 billion in costs this year.
Walmart did raise its full-year adjusted EPS guidance to $2.80 to $2.87, up from a prior range of $2.75 to $2.85. But the market focused on the Q3 warning rather than the annual raise. Despite the selloff, all 13 analysts covering WMT maintained bullish ratings as of August 21, with an average price target of $128.77 — implying upside of roughly 25% from current levels.
Home Depot: A Clean Beat With a Housing Asterisk
Home Depot's report on August 19, 2026 drew a more favorable reaction. The company posted revenue of $47.86 billion for the quarter ended July 31, up 5.7% year over year and above the consensus estimate of $47.27 billion. Adjusted earnings per share came in at $4.92, topping the $4.73 estimate. Total comparable store sales rose 1.7%, while U.S. comparable store sales grew 1.3%.
The $730.00 million in tariff refunds boosted Home Depot's gross margin to 33.7%. Yet unlike Walmart, Home Depot held its full-year guidance steady, projecting total sales growth of 2.5% to 4.5% and EPS growth of 0% to 4%. Shares rose approximately 2% to 336.27 on August 21, a positive response relative to its retail peers.
The cautious full-year outlook reflects a persistent challenge: the U.S. housing market remains "frozen" in management's words, with high mortgage rates suppressing the large remodel projects that drive Home Depot's highest-margin revenue. Professional customer demand showed improvement, and the company's same-day express delivery expansion helped lift online sales. But until housing turnover picks up, the stock is likely to remain range-bound.
Target: A Standout Quarter — Mostly
Target was arguably the most impressive of the three on a fundamental basis. For the quarter ended August 1, 2026, the Minneapolis-based retailer reported revenue of $26.54 billion, up 5.3% year over year and ahead of the $26.14 billion consensus. Comparable store sales increased 3.8%, driven by a 3.6% rise in traffic. Digital comparable sales jumped 8.7%, with same-day delivery up more than 25%.
Adjusted EPS came in at $2.46, beating the consensus of approximately $2.33 per share. The headline GAAP figure of $4.11 per share, while striking, included the $1.65 tariff refund benefit.
Target raised its full-year guidance to net sales growth of around 5% and GAAP EPS of $9.90 to $10.90 per share. Shares climbed to $163.77, nearing the 52-week high of $164.58. The stock now trades at a price-to-earnings ratio of approximately 16.99, making it the most attractively valued of the three large-cap retailers.
What's Next: All Eyes on Nvidia
With the retail earnings wave behind them, investors are pivoting to what may be the most anticipated earnings report of the year: Nvidia (NASDAQ: NVDA), which reports after the close on Wednesday, August 26, 2026.
Nvidia enters the print at $214.87 per share, and Wall Street's expectations are staggering. The consensus revenue estimate for Nvidia's fiscal second quarter stands at approximately $91.90 billion — up roughly 97% year over year. Analysts are looking for GAAP gross margins near 74.9% and net income approaching $51.90 billion.
All 15 analysts covering NVDA carry bullish ratings, with an average price target of 318.00 — implying potential upside of roughly 48% from current levels. The high target sits at 425.00. To truly satisfy the market, analysts say Nvidia would need to deliver a Q3 revenue guide near $105.00 billion or higher, confirmation that Rubin-architecture chip deliveries are on schedule, and gross margins holding near 75%.
The AI infrastructure buildout driving Nvidia's growth hasn't slowed. But at a $5.20 trillion market capitalization, expectations are already enormous — and even the company's recent history shows that strong results don't always produce strong stock reactions.
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