Walmart and Target both reported earnings that were below Wall Street expectations.
The two companies said their online grocery business will continue to grow at a healthy clip through the end of the year.
In fact, Walmart reported a profit of $4.6 billion, or about 1% of revenue, while Target saw a loss of $1.5 billion.
However, Walmart said it expects to post an operating loss of more than $3 billion, which would put it in a better position to pay dividends.
Walmart has been losing money since the start of the recession, and analysts believe that it will be harder to recover in the coming years.
Target has also been losing revenue for a long time.
Analysts have been predicting that Target will see its profitability drop significantly this year, which could impact the retailer’s stock price.
“While Walmart’s share price has increased in recent months, Target’s is trending downward,” Barclays analyst Craig Johnson wrote in a research note.
“While Target’s shares have increased in value, it has also lost value in the past year.”
Target is also a target for other investors as the company struggles to keep up with the growth of Amazon.com.
The online retailer recently announced a deal with Amazon that will let customers shop from a single Amazon website.
Amazon also has plans to launch a new video-streaming service, Amazon Prime Video.
Analysts believe that Amazon’s Prime Video could boost Walmart’s stock.
“As the growth in Prime Video increases, the market will see an increase in Amazon’s shares, which in turn will increase the price of Target’s stock,” Barclays analysts wrote.
Target’s shares are down more than 30% since the beginning of the fiscal year, and have fallen more than 25% since December.