Walmart Quarterly earnings reports are due Thursday, with investors and economists hoping to get a sense of the health of U.S. households and the outlook for the broader economy.
Analysts expect the following for the big-box retailer, according to consensus estimates from London Stock Exchange Group (LSEG):
- Earnings per share: 65 cents
- income: $168.53 billion
As the largest retailer in the United States, Walmart is uniquely positioned to have a deep understanding of consumer spending and thrift. The company’s reputation for value has boosted sales over the past two years as inflation drove more high-income consumers to its stores and websites.
Inflation has slowed and returned to historical levels, according to July data from the U.S. Department of Labor. The Consumer Price Index measures the price of various goods and services, Rose 2.9% last month Compared to a year ago. This is the lowest level since March 2021.
However, prices are much higher than before the epidemic. Make consumers frustrated and nervous. one employment report Also from the Department of Labor earlier this month Stirring worries and triggering sharp stock market sell-offgrowth slowed and the unemployment rate rose more than expected.
Earnings reports from some companies heightened concerns about the economy. home depot Tuesday Earnings, revenue beat quarterly estimates But it warned that sales would be slow in the second half of the year and consumers were wary, even among middle- and upper-income customers.
Walmart CEO Doug McMillon and Chief Financial Officer John David Rainey said consumer behavior is consistent from quarter to quarter as shoppers pursue value and change how they spend. Be selective.
RBC Capital retail analyst Steve Shemesh said he and other investors will be eager to see whether that remains the case.
“We will seek any change in tone,” he said.
Walmart, with its value reputation and large grocery business, has generally been more resilient than its peers in a challenging economy, as customers turn to Walmart stores to save money when time is tight. The company said in May that Expected to be on the high end or slightly above its full-year guidance, which called for net sales growth of 3% to 4% and adjusted earnings per share of between $2.23 and $2.37.
Shemesh said if Wal-Mart’s results disappoint this quarter, it could set off alarm bells.
“The broader investment community will interpret this as, ‘Walmart is challenged. Others may face greater challenges than this,'” he said.
On the other hand, he said, if Walmart beats expectations, investors will have to parse the earnings report carefully.
“If Walmart beats, your gut would tell you ‘OK, Walmart beats. Consumers are fine,'” he said. But, he added, the company’s strong performance may come from even affluent shoppers Increasing reliance on Walmart for a wider variety of goods.
In addition to attracting inflation-weary shoppers, Walmart has taken steps of its own to drive growth. The company is looking beyond traditional retail channels as it tries to add more sellers to its third-party marketplace, sell more ads and attract more members to its subscription service Walmart+. it’s also Launch of new grocery brandBettergoods, with most items under $5, including meal solutions like frozen pizza and chicken wings, which can be cheaper alternatives to fast food.
Walmart shares closed at $68.66 on Wednesday. The company’s shares are up nearly 31% so far this year, outpacing the S&P 500’s gain of about 14%.
