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Walmart Earnings Preview: What Investors Can Expect on Tuesday.

Alex Vellor
07:22am, Monday, Feb 19, 2024
Photo by Marques Thomas on Unsplash

Walmart (NYSE: WMT) gears up to unveil its earnings before tomorrow's market opens. The company's previous quarter showcased a revenue of $160.8B, marking a 5.2% increase year-on-year and surpassing analyst expectations by 1.4%. This mixed quarter saw Walmart beating Wall Street's revenue estimates with better-than-expected same-store sales growth, albeit with a full-year adjusted EPS forecast that fell short of analysts' predictions.

Short Summary of Q3 2023 for WMT

For the upcoming earnings report, analysts are projecting a 3.2% year-on-year increase in Walmart's revenue, amounting to $169.3B. This represents a deceleration from the 7.3% year-over-year revenue increase recorded in the same quarter last year. Adjusted earnings per share (EPS) are anticipated to be $1.65.

Analyst sentiment towards Walmart has been increasingly optimistic, with revenue estimates revised upwards nine times over the last thirty days.
The company has consistently exceeded Wall Street's expectations, surpassing revenue estimates by an average of 2.5% over the past two years.

As Walmart is the first among its peers to report earnings this season, its performance could serve as a bellwether for the non-discretionary retail sector, which has seen a 4.2% average stock increase over the last month. Walmart has seen a 4.5% stock increase during the same period, entering the earnings with an analyst price target of $181.6 against a share price of $169.6.

A particular area of focus is Walmart's online sales performance in the U.S., which is expected to have grown by 11% year-over-year to $18.45 billion for the holiday quarter. This marks the only quarter in the fiscal year 2024 where online sales growth didn't surpass 20%. Globally, Walmart's e-commerce sales are forecasted to continue their upward trajectory, with a projected $28.22 billion in revenue, signifying a 15.7% increase year-over-year.

This contrasts with its online rival, Amazon.com Inc. (AMZN), which reported a 13% jump in North American e-commerce sales for the holiday quarter.

Below is a table summarizing Walmart's expected earnings highlights:

Metric Expected Value Year-over-Year Change
Total revenue $169.3 billion +3.2%
Adjusted EPS $1.65 N/A
U.S. Online Sales $18.45 billion +11%
Global Online Revenue $28.22 billion +15.7%

Walmart's performance, especially in the context of its e-commerce growth, provides critical insights into broader retail and consumer trends.

The company's ability to navigate the competitive landscape, particularly against giants like Amazon, speaks volumes about its strategic positioning and potential for sustained growth. As investors look towards Walmart's earnings report, the results will reflect the company's health and offer clues into the state of retail at large, especially in the non-discretionary segment.

Walmart's forthcoming earnings report is a highly anticipated event that could significantly affect the retail industry. With a history of exceeding expectations and a positive sentiment among analysts, the outcome could reinforce Walmart's standing as a leading player in both the physical and digital retail spaces.

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Alex Vellor

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