Results just reported were surprisingly strong, with the stock up by about 14% in response as I’m writing this.

Several thoughts:

–TGT shares are still almost 40% below their pandemic highs (despite being up by 60% from last September’s lows), while Walmart’s (WMT) are about 50% higher today than at their covid peak

–for a long time my suspicion has been that TGT’s post-pandemic excess inventory problem was larger (maybe a lot larger) than the company cared to admit. Saying so, however, would doubtless have made disposal much more difficult. I take the latest results as a sign that this problem is in the rear view mirror and that business is finally beginning to recover from the pandemic days

–a simple trading rule over the past few decades would have been to own WMT during bad times and TGT during good, following the flow of customers trading down in recession and back up during recovery. There’s still something to this, I think, even though I’m impressed by what I see as a new energy from WMT management (note: I own both TGT and WMT shares). It will be interesting to watch the performance differential from now on