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 shoppers to its stores and website.
Inflation has slowed and returned to historical levels, according to July data from the U.S. Department of Labor. The consumer price index, which measures the price of a variety of goods and services, rose 2.9% Last month compared to the same period last year. This is the lowest level since March 2021.
However, prices are well above pre-pandemic levels, leaving consumers frustrated and nervous. The Labor Department’s jobs report earlier this month also stoked concerns and triggered a sharp sell-off in stocks as economic growth slowed and the unemployment rate rose more than expected.
Earnings reports from some companies heightened concerns about the economy. home depot The company beat quarterly earnings and revenue estimates on Tuesday but warned of slow sales in the second half and caution among consumers, 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 it expected full-year results to be at the high end or slightly above its full-year guidance, which called for net sales to rise 3% to 4% and adjusted earnings per share to be 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 could 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 attempts to add more sellers to its third-party marketplace, sell more ads and attract more members to its subscription service Walmart+. It also launched a new grocery brand, Bettergoods, with most items under $5, including meal solutions like frozen pizza and chicken wings that could 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%.
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