The good, the bad, and the ugly of Q3 earnings
It’s Wednesday, futurists, and earnings season rages on.Â
We recently spoke with Deloitte’s Retail Research Leader, Lupine Skelly, about how consumers’ economic outlook hasn’t been this bleak since 1997. That doesn’t mean they’re not shopping. They’re just shopping differently.Â
The latest round of earnings results illustrates how consumers are adapting their shopping behaviors to align with new definitions of value. For many, price is front and center. For others, the value of the product and experience trumps financial benefit. Here are some key takeaways across the board, and if you want to see our last round-up, click here.
🎯 Target. We have repeatedly covered Target’s earnings this year, especially in the context of the retailer’s major strategic and cultural misses, and this quarter’s results show that the downward trajectory continues. With drops across total sales (-1.5%), merchandise sales (-1.9%), comp sales (-2.7%), and net income (-19.3%), Target is embarking on its Next Chapter of Growth, which includes a more design-led merchandising, new technology advancements, and apparently a so-cheery-it’s-creepy guest experience.
đź‘ź On. While the outlook for Allbirds remains bleak, On posted a 25% net sales increase in Q3 and raised its full-year guidance to 34% expected sales growth. Net income surged 290% from last year, while gross margin increased 65.7%. CEO and CFO Martin Hoffman noted that the brand has focused on building a “premium business,” as evidenced by its balance sheet. This positioning is also a big reason why the brand isn’t discounting during the holidays while other players are anxiously building their pricing playbooks. He even went so far as to say that tariff-related price increases have been “very well received” by On’s customer base.Â
đź’¸ TJX. On the opposite side of the price spectrum, TJX has reported similarly positive results. Net income has increased by 11.2%, while total sales have improved by 7.5%. There were gains across the business, from TJX and Marshalls US (+7.1%) to HomeGoods US (+7.8%), showing that the portfolio continues to strike the right balance of product, price, placement, and experience.Â
🏡 Lowe’s. Net income fell 4.7%, but online sales (+11.4%), total sales (+3.2%), and comp sales (+0.4%) all increased. The retailer is navigating a changing housing market and speaking to a younger, possibly more uneasy consumer, which has led to some shifts in its marketing approach, especially on social media. However, the Pro business remains a critical area of growth.Â
🛠️ Home Depot. The retailer posted 2.8% sales growth, but most of that came from its acquisition of GMS. Earnings held relatively steady at $3.6B, but consumers are largely sitting in maintenance mode, not makeover mode. Moreover, the quarter lacked major storms, a big sales driver for Home Depot.
‍Bringing Craft to Commerce. Indigenous-led clothing brand TÓPA is Ralph Lauren’s latest partner in its Artist in Residence program, an initiative that connects heritage creatives with the brand. Jocy and Trae Little Sky are founders of TÓPA, award-winning performers, designers, and members of the Oceti Sakowin. (They’re also wife and husband.) This new joint collection celebrates enduring craftsmanship, merging Native design with modern silhouettes for fall and winter. TÓPA means “four” in the languages of the Oceti Sakowin, representing the four directions, four seasons, four stages of life, and the four colors of red, black, yellow, and white, all of which are highly represented in the collection. The collection is marked by a short film that shares the brand’s story, artistry, cultural background, and celebrations that influenced the designs.
Stepping into Stores. Bombas has opened its third new store in a month, a bold, aggressive growth move for the specialty sock brand that has since expanded into a true premium basics brand. The brand is using the physical retail management platform Leap to identify new real estate opportunities. The latest store, which is at the Domain in Austin, follows a Manhattan flagship and a location in Boca Raton, FL.
Inside the Resale Movement. New data from eBay delves deeper into the drivers of secondhand spending. For many, the appeal is behavioral: 65% say they enjoy the “thrill of the hunt.” For others, it’s cultural: 63% consider themselves part of the “recommerce community,” and 56% say buying secondhand allows them to express their personal style.
But the most fascinating takeaway is how these feelings ladder up to broader shifts in how consumers participate in commerce. More than two-thirds of consumers (67%) say they’re reevaluating what’s important to them, and they’re buying and selling pre-loved goods to better align with their values.
Betting on the Box. AB InBev is nearing a deal to buy BeatBox, the alcoholic punch brand that wants us to “drink outside the box.” With its fruity flavors and dynamic packaging, the Shaquille O’Neal and Mark Cuban-backed brand has generated a loyal following, especially among Gen Z, and was on track to generate $175 million in 2024. The purchase would value the brand at about $700M.Â
Depression-Era Dishes Take Over the FYP. TikTok’s For You Page has always been a haven for recipes, exposing users to keto lifestyles and protein-packed diets. But now, a new trend is emerging: Depression-era recipes. As consumers tighten their budgets, they’re turning to recipes like fried potatoes with hot dogs, pork cake (a meatloaf combined with a bread loaf), and water pie (a pie literally filled with water and drizzled with vanilla extract, flour, and sugar). Talk about bringing trad wife creator culture to the next level.Â
The Fulfillment Missing Link. Vendors and brands representing more than $1T in GMV, including Manhattan Associates, IBM Sterling, Pipe17, Radial, Ryder, Allbirds, Ipsy, commercetools, and Commerce, are uniting for the Commerce Operations Foundation and a new open standard meant to unify how commerce systems communicate: Order Network eXchange (onX).Â
While OpenAI’s Agentic Commerce Protocol (ACP) and Google’s Agent Payments (AP2) are defining how AI can capture intent, empower consumers, and even process payments, they lack the operational backbone that provides transparency into inventory levels and actual product fulfillment. OnX introduces a consistent, extensible interface based on the Model Context Protocol (MCP), enabling ERPs, 3PLs, and OMSs to capture, fulfill, and reconcile orders in real time.
More than 62 players across the commerce ecosystem are already on board with onX, demonstrating that the industry is ready to address the operational complexities that are preventing AI-driven commerce from being truly seamless end-to-end. As Kelly Goetsch, Founding President of the Commerce Operations Foundation and President of Pipe17, noted: "AI has made buying effortless. Now we need to make fulfillment intelligent.”
A(jean)tic Commerce. Levi Strauss & Co. (LS&Co.) is developing an integrated, agentic AI orchestration platform built around a single “super-agent” to streamline tasks across the organization. The agentic framework will be embedded within Microsoft Teams and powered by Azure, acting as an intermediary to serve users across IT, human resources, operations, and other functions. With a series of “specialized agents,” CEO Michelle Gass believes her team will have the knowledge and efficiency needed to bring the retailer closer to being a $10B business.
This is the next phase of a larger AI strategy that’s been in the works. LS&Co. has also rolled out Outfitting, a personalized styling tool for consumers that aligns with their preferences, purchase history, and current trends. When users click an item, they’ll see a “Complete the Look” area that offers more guidance. Meanwhile, Levi’s store employees can tap into the STITCH AI assistant via a mobile app to access on-demand product information, operational procedures, and training materials.Â
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