Key takeout
Amazon will launch its revenue reporting season for major retailers this week, offering investors a snapshot of consumer spending in the wake of the blockbuster holiday season.
Amazon (AMZN) is scheduled to report fourth quarter results on Thursday, followed by Walmart (WMT) on February 20th. Both Costco (Cost) and Target (TGT) are scheduled to be reported in early March.
Retailers are likely to report strong sales after a record holiday shopping season when retailers exceeded expectations, said Mark Matthews, executive director of research for the National Federation of Retailers.
According to the Alphasense transcript, MasterCard CEO Michael Miebach said in a company’s revenue call last week that he “still is involved with consumers.” “Wealthy consumers benefit from the effects of wealth, but the mass segment remains supported by the labour market.”
Although sales are expected to rise slightly in 2025, analysts warn that tariffs or stock market corrections could limit momentum.
What analysts expect from major retailers this year
UBS analysts estimate that Amazon, Walmart and Costco have accounted for 40-50% of all retail sales growth (excluding cars) over the past year.
Online shopping was grounded as Americans wanted bargains and convenience. Amazon has moved more items than ever during the main holiday sale, and it appears that the value of items sold on the platform in 2025 is increasing by 10%, UBS analysts said .
Walmart has also made shopping more convenient by expanding its delivery service that attracted high-income households, executives said according to the last quarter. Certainly, the chain is still appealing to bargain hunters, and searching for consumer value means Walmart could help store sales increase 2-4% year-on-year in 2025. UBS said.
Costco is bolstering its e-commerce business, and its long-standing focus on value resonates with consumers, UBS analysts said. They predict that the same store sales at wholesale clubs could grow by 3.8-5.8% in 2025.
The company said in November that discounts play a major role in driving sales with targets. Consumer pullbacks can be a challenge for targets with fewer essential items than some of their counterparts. However, UBS said that a discretionary item replacement cycle could benefit the goal. This could report a flat 3% growth in the same store sales this year, according to its estimates.
What factors are involved?
UBS estimates that consumers spent about 2% more products than 2023 and 2024, with an additional 2.5% increase this year.
UBS analysts argue that the terms are favorable for robust spending. Inflation has eased, but the job market is stable and stocks are gaining value. They hope for tax cuts, reduced government spending and deregulation under the Trump administration, and could accelerate economic growth and then promote sales of “super-charged” apparel and shoes.
However, there are a variety of results possible, including a reduction in retail spending. Tariffs widely imposed on goods from China, Mexico and Canada could have “meaning consequences,” with 0.3-0.6 percent inflation over the next three months, according to analysts at Morgan Stanley. It could add 0.6 points to inflation. Growth in consumer spending in 2025.
According to analysts at Deutsche Bank, stock market corrections also pose another risk. Deutsche Bank analysts estimated that the stock investment valuation accelerated approximately one-third of consumer spending growth last year.
