Target Corporation (TGT) reports third-quarter earnings Wednesday morning, and if you're looking for a feel-good story about the American consumer, you might want to look elsewhere. Analysts are basically bracing for impact, with the consensus pointing toward declining sales, shrinking profits, and mounting evidence that the retail giant is losing ground to both Walmart (WMT) and Amazon.com Inc (AMZN).

Here's what Wall Street expects, what the numbers are telling us, and why this quarter matters more than usual.

The Numbers Don't Look Great

Analysts are forecasting third-quarter revenue of $25.34 billion, down from $25.67 billion in the same period last year. Earnings per share are expected to come in at $1.72, compared to $1.85 a year ago. Neither of those trends point in the right direction.

To be fair, Target has a decent track record of beating expectations lately. The company topped analyst estimates in six of the last ten quarters for revenue and seven out of ten for earnings per share, including the most recent second quarter. But past performance doesn't guarantee future results, especially when the headwinds are this visible.

Analysts Are Skeptical

Telsey analyst Joseph Feldman is projecting earnings per share of $1.76 with comparable sales down 1.5% year-over-year. He's maintained a Market Perform rating with a $110 price target, but his outlook isn't exactly bullish.

"Our outlook incorporates ongoing pressure from cautious consumer spending on discretionary categories, incremental costs, including promotions and investments in technology, and ongoing headwinds from higher tariffs," Feldman said.

He noted that new CEO Michael Fiddelke is focusing on the right things: merchandising, shopping experience, and technology. These are "right steps to revive the business," Feldman said, but investors may need patience.

Bank of America's Robert F. Ohmes is even less optimistic, maintaining an Underperform rating with a $93 price target. He thinks Target's sales likely slowed in the third quarter, which could mean downside surprises ahead.

"We also see higher exposure to tariffs & other headwinds for Target with less long-term potential offsets," Ohmes said.

His bigger concern? Target is falling behind on digital growth and investments compared to Walmart, while Amazon keeps grabbing market share. Ohmes estimates that Target sources around 30% of its owned brand products from China, with categories like electronics and toys even more concentrated. That's a problem when tariffs are in play.

"We see increasing longer-term sales and margin risks for TGT on slowing digital sales growth, a lack of scale in digital advertising and 3P marketplace, elevated tariff, pricing and merchandising headwinds, and increasing competitive threats from WMT and AMZN," he added.

The Traffic Data Tells a Story

Foot traffic numbers from Placer.ai paint a concerning picture. Target's traffic was down 2.7% year-over-year in the third quarter, with declines of 2.5% in July, 0.8% in August, and 5.0% in September.

Meanwhile, Walmart's traffic fell just 0.4% for the quarter overall—down 0.2% in July, up 1.9% in August, and down 0.5% in September. While traffic doesn't perfectly correlate with sales, this data suggests Walmart is taking market share from Target, and that meeting analyst expectations could be a challenge.

What to Watch Wednesday

In the second quarter, Target managed to offset a 1.2% drop in merchandise sales with a 14.2% increase in non-merchandise sales. How different segments perform in Q3 will be critical to understanding the company's trajectory.

Given that analysts are already expecting a weak quarter, the real action might be in Target's guidance and commentary. After second-quarter results, the company reaffirmed its full-year outlook. Any adjustments on Wednesday could move the stock significantly.

There are some potential bright spots. Target recently slashed prices on over 3,000 items across food, beverage, and essentials—moves that could boost fourth-quarter sales if cost-conscious shoppers respond. The retailer also launched an AI-powered gift finder aimed at capturing holiday spending.

And here's an interesting twist: Placer.ai data showed Target's traffic was actually up 0.9% year-over-year in October. That could signal the beginning of a fourth-quarter turnaround, or it could just be noise. We'll find out soon enough.

The Stock Isn't Having a Good Year

Target shares closed up 0.1% at $88.59 on Tuesday, trading near the bottom of their 52-week range of $85.36 to $158.42. The stock is down 35.5% year-to-date in 2025, which tells you pretty much everything you need to know about investor sentiment heading into this report.

Wednesday morning will either confirm everyone's worst fears or provide a glimmer of hope that the company's turnaround efforts are starting to work. Either way, it's going to be a telling quarter.