Retailer Reports: Walmart, Home Depot, and U.S. Retail Sales

Walmart and Home Depot announced positive earnings. The Retail Sales report comes in better-than-expected. The labor participation rate has yet to recover from the pandemic and companies may need to look for alternatives. and Home Depot
5 min read
Photo by Getty Images

Key Takeaways

  • Walmart and Home Depot Announce Earnings 

  • U.S. Retail Sales Come in Hotter Than Expected 

  • Labor Shortages Continue Cause Companies Complications

(Tuesday Market Open) Retailers take their turn in the earnings spotlight with a few big retailers taking center stage. Additionally, a hotter than expected U.S. Retail Sales report was released by the U.S. Census Bureau. Despite the increase in sales figures, a big problem that retailers are seeing is worker shortages because many workers have yet to return from the pandemic layoffs. Let’s breakdown all this retailer news starting with earnings.

Walmart (WMT) announced earnings before the open. It beat on earnings and revenue estimates. The company reported a 6% increase in comparative sales excluding fuel led by its Sam’s Club division that increased 13.9%. Its eCommerce division rose 8% bring its two-year online sales growth to a staggering 87%. Walmart also increased its fiscal year earnings outlook.

Pandemic home improvement projects have not stopped if Home Depot’s (HD) earnings are any indication. Home Depot’s third quarter earnings rose 9.8% on a 6.1% increase in comparative sales a year ago.

Walmart and Home Deport are both Dow Jones Industrial Average ($DJI) components and the news has the index futures pointing higher before the open.

In other earnings news, EV maker Lucid (LCID) is up more than 5% before the open. The company missed on earnings and revenue estimates but showed investors that it had a large cash position and increasing orders. Additionally, EV makers look to be big beneficiaries of President Biden’s climate change infrastructure plans.

Also, in the EV space, CEO Elon Musk continues to take profits on his company, Tesla (TSLA). According to Bloomberg, Musk has now sold a $7.8 billion worth of stock.

The U.S. retail sales report showed an increase of 1.7% which is higher than the expected 1.5%. When removing vehicle sales, the core retail sales increased 1.7%—well ahead of the 1.0% forecasted. However, the numbers are not adjusted for inflation so the better-than-expected report could be a little skewed by the rising costs of goods and service.  

Finally, the White House is also expected to announce their nomination for a Fed chairperson today. According to Barron’s, the top two contenders are existing Fed Chair Jerome Powell and Fed Governor Lael Brainard.

Labor Improvement

Aside from inflation, probably the biggest focus in the economy now is the employment situation. Obviously, the pandemic took a big toll on businesses around the country and consequently with employment levels. However, by many measures, the employment situation is getting better in the United States. Last week’s first-time unemployment claims came in at 267k. While this number is not quite at the pre-pandemic low levels we saw, it represents a big stride toward normalcy. The nation’s unemployment rate is now sitting at 4.6%, down from the pandemic high of 14.7%, again, showing a return to levels we have hoped to see.

On one hand, the improving employment numbers make the Fed’s job easier in that it opens the way to a more hawkish monetary stance to combat inflationary pressures. Put another way, if the economy was saddled with very high unemployment, it would be difficult for the Fed to reduce its bond-purchasing program or raise the fed funds rate for fear of suppressing economic growth and employment. On the other hand, the improving employment numbers are only giving a partial view of what is happening in the labor markets.  

Labor participation
CHART OF THE DAYTAKE THIS JOB. Labor Force Participation has declined over the past 20 years. The pandemic saw a steep decline but has yet to recover completely. FRED® is a registered trademark of the Federal Reserve Bank of St. Louis. The Federal Reserve Bank of St. Louis does not sponsor or endorse and is not affiliated with TD Ameritrade. Data Sources: ICE, S&P Dow Jones Indices. Chart source: The thinkorswim® platformFor illustrative purposes only. Past performance does not guarantee future results. 

Labor Conundrum: Despite the improving employment numbers mentioned above, there are a lot of companies still struggling to fill job openings. You may have seen this at restaurants, which have limited their capacity due to staff shortages, or even in delayed shipping deliveries because of driver shortages. This is partially the result of many people voluntarily leaving the workplace. You can see this in the increasing “quits rate” of last Friday’s JOLTS report as well as in the Labor Force Participation Rate (see Chart of the Day). The latter measure is an estimate of the country’s active workforce, and lower numbers indicate fewer voluntary participants in the labor force. Labor force participation has been generally declining for 20 years, and while it has recovered a little from its pandemic lows, the upsurge appears to be stagnating.

Permanent Changes?: What is the cause of this voluntary reduction in the workforce? Anecdotally, many of us have heard of employees becoming more discriminating in finding the job that better fits their needs, whether that means telecommuting, childcare restraints, health concerns, or finding a meaningful job. Whatever the cause of the workforce reduction, it is a significant enough phenomenon that it has generated a name: “The Great Resignation.”

But the bigger question is, are these changes permanent, or are they some temporary pandemic-induced change that will reverse itself as the pandemic response eventually comes to an end?

According to Goldman Sachs Global Investment Research, of the approximately 5 million persons who left the labor force since the start of the pandemic, most (3.4 million) are over 55 years old. In other words, most of these people are likely not to return to the workforce. Of those that are under 55 years old, most view their exits as temporary. So, the bottom line is that we are seeing real changes in the workforce that aren’t likely going to reverse themselves. This conundrum—that fewer people are out of work involuntarily, yet there is still a labor shortage—poses challenges for the economy. Consequently, given that most of the lost workers aren’t coming back, the economy will need to adapt. I don’t know exactly what form all those adaptations will take, but we have already seen some, including more telecommuting, job flexibility, and rising wages. The labor force appears to have gained some leverage since the pandemic’s beginning.

Company Changes: So how are companies responding to these issues? Retailers like Nike (NKE) are becoming less reliant on labor in their brick and mortar stores by pushing a significant amount of its retail sales online. Much of IBM’s (IBM) operations are run in the Far East, thus reducing its reliance on U.S. labor.

Another approach is to increase automation. This may be one reason why the Information Technology sector has been the top-performing sector over the past six months. Companies like Nvidia (NVDA) and Salesforce (CRM) have grown greatly over the past six months, up 111% and 42% respectively. Also consider industrial companies that help others with automation. Rockwell Automation (ROK) is a company that helps companies automate, and the market has rewarded it, gaining 26% over the past six months. Of course, there’s no guarantee that the performance of any of these example stocks mentioned here will continue into the future, but keep your eyes open, because even though the economy has challenges, there may still be a variety of potential opportunities out there for investors.

Good Trading, 



Helpful Educational Content and Programming

  • Check out all of our upcoming Webcasts or watch any of our hundreds of archived videos, covering everything from market commentary to portfolio planning basics to trading strategies for active investors. You can also deepen your investing know-how with our free online immersive courses. No matter your experience level, there’s something for everybody.

  • Looking to stay on top of the markets? Check out the TD Ameritrade Network, live programming which brings you market news and helps you hone your trading knowledge. And for the day’s hottest happenings, delivered right to your inbox, you can now subscribe to the daily Market Minute newsletter here.

    TD Ameritrade Network is brought to you by TD Ameritrade Media Productions Company. TD Ameritrade Media Productions Company and TD Ameritrade, Inc. are separate but affiliated subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation.


Key Takeaways

  • Walmart and Home Depot Announce Earnings 

  • U.S. Retail Sales Come in Hotter Than Expected 

  • Labor Shortages Continue Cause Companies Complications

Related Videos

Call Us

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.  

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.


Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2021 Charles Schwab & Co. Inc. All rights reserved.

Scroll to Top