By Mark Seavy  

With uncertainty continuing to swirl around employment, tariffs, and the U.S. economy, retailers are tempering expectations for the fourth quarter and heading into 2026. 

In a series of financial earnings released over the past few days, retailers were both optimistic and realistic regarding prospects for holiday sales. Holiday retail sales in the U.S. this year are expected to increase 3.6% compared to 2024, when the business posted a 4.8% gain, according to Loop Capital. 

Retailers imposed tariff-related price increases in select categories, the magnitude and breadth of which was far less than expected when the levies were first imposed in April. Walmart, for example, increased unit prices by 1.3% in Q3, while off-price retailers like Burlington and Ross Stores held the line by wrangling cost concessions from suppliers. And while discounter Five Below did boost prices, it was limited to 15-20% of its product assortment, Anthony Chukumba, Managing Director and Senior Research Analyst at Loop Capital, told CNBC. 

“I would sum up our pricing strategy in three words: be very careful,” said Michael O’Sullivan, CEO at Burlington Stores, which trimmed inventory in a bid to force it to turn over faster. “We recognize that, because of tariffs, prices are going up across the retail industry, but we will not raise prices unless we’ve seen them go up elsewhere. And, even then, we will test and monitor the impact of those price increases.” 

With those price increases in mind, consumers are seeking “value” during the holiday season—although that can be defined by several factors, including quality and quantity, retail executives said.  

Walmart launched 90-day price “roll backs” on 7,400 items in Q3, more than half of them in grocery, CEO Doug McMillon said. Since the start of the year, more than 2,000 rollbacks have become “everyday low” prices, he said. While the “consumer environment remains dynamic,” Walmart expects Q4 sales to increase 3.75-4.75% and boosted the forecast for the full year to a 4.8-5.1% gain, up from a previous 3.75-4.75%, CFO John Rainey said. 

Target, which lowered prices on 3,000 food and other “essential” items, continues to see a high degree of volatility and shifting consumer demand in its business, Chief Operating Officer Michael Fiddelke said. Moving forward, Target is focusing on 5,000 of the most frequently purchased items that account for 30% of its unit sales.  

While Target’s Q3 sales decreased 1.5% ($25.3 billion) on a 2.7% decline in same-store sales, Walmart posted a 5.8% ($179.5 billion) gain in revenue on a 4.5% increase in same-store sales. Target is forecasting a “low single digit” percentage decline in Q4 sales. And Burlington projected flat-2% increases in same-store sales both for Q4 and fiscal 2026. 

“Discretionally income remains pressured, especially among low to middle income consumers as well as younger customers, who are becoming savvier and expecting more value,” said Michael Bender, CEO at Kohl’s, which reported a 2.8% decline ($3.4 billion) in Q3 revenue on a 1.7% drop in same-store sales.  “We expect this customer behavior to continue into the fourth quarter as we believe the macro-economic environment will remain uncertain.” 

To address this uncertainty, retailers are rolling out new strategies or expanding ongoing efforts headed into 2026.  

Target is focusing on a “Fun 101” strategy that helped increase sales in toys by 10% in Q3 and led to “double-digit” percentage sales growth in music and videogames as well as an expanded assortment of sporting goods, Chief Commercial Officer Richard Gomez said. It is also pricing “thousands” of toys at less than $20 and has two Barbie collaborations with interior designer and reality TV star Joanna Gaines. The retailer is also doubling the number of new items in its holiday assortment to 20,000, Gomez said.  

Burlington, meanwhile, is increasing the number of new stores forecast for 2026 to 110, up from the 104 opened this year. And pop culture retailer Minioso will expand its roster of contracted artists developing its branded characters to 16 in 2026 and the retailer is expanding its portfolio of owned IP, Minioso CFO Eason Zhang said. Minioso also opened a Zootopia 2 pop-up store in China in advance of the film’s release on November 26. 

“We are proactively discovering high-potential original toy art IPs globally and working hard to build Minioso into the trendy toy IP landscape,” Minioso Founder Guofu Ye said. “When there is one IP that breaks out, it will definitely show exponential growth” that will help spur sales in an uncertain economy.