Just been digging into the latest earnings reports and there's some interesting stuff happening in the retail sector. Walmart's been on quite a run - up over 30% in the past year, which is solid considering the broader market only gained 18.5%. Even after their recent earnings report, shares are still holding gains from earlier this year.

What caught my eye is how Walmart's ecommerce business is now fully profitable and making up about 18% of total revenues. Their U.S. store comps came in at 4.6%, beating expectations, and online sales jumped 27% year-over-year. But here's the thing - their advertising business is really accelerating. They brought in $6.4 billion in ad revenue last year, which is a 46% jump. That's where the real margin expansion is happening for them.

Home Depot's earnings were solid too, though the home improvement space remains pretty tough with high home prices and mortgage rates still weighing on demand. Their store comps barely moved at 0.4%, but they did beat estimates which had expected a decline.

Looking at the broader retail sector, about 22 of the 30 retail companies in the S&P 500 have reported Q4 results. The retail sector is showing earnings up 6.9% with revenues higher by 8.6%, though only 50% beat earnings estimates. Amazon's Q4 was interesting - earnings up 5.9% but revenues surged 13.6%. When you strip out Amazon, the retail sector earnings growth picture looks a bit different.

For the full year 2025, the retail sector is tracking to earnings growth of 12.1% on 6.4% higher revenues. Pretty decent performance overall, though definitely mixed depending on which companies you're looking at. The retail sector remains a mix of traditional brick-and-mortar operators adapting to ecommerce and pure-play digital players, each with their own momentum.