December 28, 2024

People walk near the entrance of a Walmart store on May 14, 2024 in Miami, Florida.

Joe Reddell | Getty Images

Walmart With earnings due on Thursday, investors will look to the nation’s largest retailers to gauge the health of the U.S. consumer and the strength of the industry.

According to a survey of analysts by London Stock Exchange Group (LSEG), Wall Street expects the following for the discounter:

  • Earnings per share: Expected adjustment to 52 cents
  • income: US$159.5 billion

As the largest retailer and private employer in the United States, Walmart is often seen as a bellwether for the U.S. economy. However, in times of inflation, it generally performs better than other retailers because it sells staples like groceries and has a value-oriented reputation.

Even so, discounters are feeling inflation as customers are adding fewer items to their shopping carts and are reluctant to buy pricier items like televisions or computers.

This week brings promising news for Walmart and other retailers. Inflation slowed in April, according to data released Wednesday by the Labor Department. Consumer prices increased by 3.4% compared with the same period last year. The closely watched number tracks the prices of goods and services at cash registers.

Walmart expects sales to grow this quarter and for the full year. The company said in February that it expected consolidated net sales to grow 4% to 5% in the fiscal first quarter. It also expects adjusted earnings per share before the stock split of $1.48 to $1.56. The company conducted a three-for-one stock split in February.

Walmart has been cutting spending in some areas and investing heavily in others. Earlier this week, the company said it would lay off and relocate hundreds of its employees, many of whom will be moved to its headquarters in Bentonville, Arkansas. The move comes on the heels of another cost-cutting move by Walmart: closing Walmart Health Clinics, a network of doctor and dentist offices located next to its stores.

On the other hand, the big box retailer has put its money elsewhere. In pursuit of advertising revenue, Walmart announced in February that it would acquire smart TV maker Vizio for $2.3 billion. It is also upgrading and modernizing more than 1,400 stores across the country. The company recently launched a new private label grocery brand with items and flavors targeted at younger and affluent shoppers.

Walmart shares closed at $59.83 on Wednesday, giving the company a market share of $482.22 billion. The company’s shares are up nearly 14% so far this year, outpacing the S&P 500’s roughly 11% gain over the same period.

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