Walmart Inc and Target Corp (Target) are the prelude to the thunderous US retail performance.

Ross Stores, an American discount department store chain, opened more than 24% lower on Friday, May 20, with its shares falling to $69.76 at the start of the day, the lowest since March 2020, and the biggest intraday decline since 1986.

The plunge came after Ross said Thursday that revenue, profit and same-store sales growth for the fiscal first quarter ended April 30 were all lower than expected:

First-quarter earnings per share (EPS) fell 27.6% year-on-year to $0.97, while net income fell 29% to $388 million. Analysts expect EPS to be $1.00, down 25.4% from a year earlier.

First-quarter sales fell 4.4 per cent year-on-year to $4.3 billion, while analysts expected $4.5 billion to remain unchanged from a year earlier; same-store sales fell 7 per cent year-on-year and analysts expected a drop of 2.7 per cent.

Ross's guidance was also worse than expected, predicting a 4% to 6% drop in same-store sales in the second quarter, while analysts expected an increase of 2.5%. The company expects full-year same-store sales to fall 2 to 4 per cent, compared with zero to 3 per cent growth; it expects full-year EPS to be between $4.34 and $4.58, down about 6 to 10.9 per cent from the previous fiscal year.

Ross's CEO Barbara Rentler commented on the results that the external environment had proved that fiscal year 2022 was extremely challenging because the conflict between Russia and Ukraine intensified high inflationary pressures that consumers had not seen in four decades. Michael Hartshorn, chief operating officer of the division, also said on the earnings call that the inflationary environment is much more serious than we expected at the beginning of the year.

Rentler said operating margin fell to 10.8% in the first quarter from 14.2% in the same period last year, reflecting a decline in same-store sales and a continuing negative impact of rising freight and payroll costs since the second half of last year. It noted that Ross offered more conservative performance guidance for the rest of the fiscal year given the decline in first-quarter results and increased uncertainty in the macroeconomic and geopolitical environment.

Wells Fargo & Co commented that Ross released a preliminary outlook for 2020 that beat investors' expectations only three months ago and has now announced one of the most surprising and disappointing results in more than a decade. There are also comments that Ross's results show that low-income consumers are feeling the blow of inflation.

Before Ross released its results, two US retail giants, Walmart Inc and Target Corp, both reported thunderous quarterly results due to high inflation and high costs.

Walmart Inc's first-quarter income and earnings were lower than expected, cutting his full-year profit forecast and forecasting a 1 per cent decline. On Tuesday, when the results were announced, Walmart Inc's share price tumbled 11%, the biggest one-day drop since 1987. Wall Street news articles pointed out that Walmart Inc's dismal performance strongly implies that it is difficult for companies to pass on the cost pressure to consumers. This has raised broader concerns about corporate profit margins and the health of US consumption-two important pillars of returns in US financial markets in recent years.

The day after Walmart Inc's earnings report, US department store giant Target Corp announced that first-quarter net profit fell 51.9% compared with the same period last year, falling below expectations for the first time since the third quarter of 2018 and lowering its full-year operating profit forecast, warning that rising costs are eroding profits. Emphasize that this may be a broader problem. Target Corp closed down nearly 25% on Wednesday, the biggest drop since Black Monday on October 19, 1987.

The weak performance of the retail giant shocked investors, reflecting declining profitability, soaring inventories and increased price cuts, which cast a shadow over the prospects of the US consumer industry, and consumers' wallets are not optimistic.

Under the pressure of the highest inflation in four decades and rising interest rates, the bleak profits of retailers such as Walmart Inc have heightened market concerns about the economy. Ethan Harris, head of global economic research at Bank of America Corporation, recently said that he does not think that the current economy can make the Fed achieve a completely benign soft landing, and that the economy is either weak or in recession.