Yes, big-box retailers Home Depot and Wal-Mart posted second-quarter profits yesterday that beat analyst expectations, and both boosted their full-year guidance slightly. But their results suggest consumers are holding back making big purchases and not even steep price-cuts are luring customers into opening their wallets.

At Home Depot, the company raised its earnings guidance for the year but lowered its sales forecast, as the largest home improvement retailer expects customers to put off big projects until the economy and customer confidence improves. The best-performing categories were lumber, electrical, lighting, plumbing, paint and hardware.

Wal-Mart admitted its strategy of aggressive discounts is not working as well as it had hoped for, and its sales at stores open at least a year in the United States, or same-store sales, fell for the fifth consecutive quarter. Even worse news for Wal-Mart, its data suggest that customers spent money on essentials as soon as they received their paychecks, and stopped as soon as their wallets were empty, which didn't take long.

Increase your money and finance knowledge from home

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Bonds for Beginners

Learn about fixed income investments.

View Course »

Add a Comment

*0 / 3000 Character Maximum