Profitability Analysis: Walmart vs. Target
Ann Haavisto
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
AbstractThe study compares the two largest retailers in the United States if not the world, Walmart andTarget, analyzing their financial performances, business strategies and market positions.Walmart, considered the largest retailer in the globe, operates on a high-volume, low-marginmodel. This strategy generates higher revenue but maintains lower profit margins. Target, on the otherhand, focuses on a more refined shopping experience which attributes to higher dollar profit revenuebut variations in net income.The three-year profitably analysis 2022-2024 reflects Walmart’s consistent revenue growth andstable, albeit lower profit margin. While Target exhibits higher but more complex profit margins. Thefindings highlight how Walmart’s large-scale operation and competitive pricing drive this company to bethe retail giant that it is. Target’s branding and customer experience model captures higher profitability.This comparison provides insights into how both retailer adjusts to market conditions, consumerbehavior and economic fluctuations while maintaining their competitive differences.By studying financial reports, historical trends, and key profitability drivers, this analysishighlights the differences in their pricing strategies, cost structures, and overall profitability. The findingsreveal that Walmart consistently maintains lower profit margins due to its emphasis on low prices andhigh sales volume, while Target, though smaller in scale, achieves slightly higher margins by focusing onquality and brand differentiation. This comparison provides insight into how business models impactprofitability in the retail sector.