A Walmart in Atlanta, Georgia, on Sunday, February 19, 2023.
Dustin Chambers | Bloomberg | Getty Images
Walmart will report its holiday quarter results on Tuesday morning as investors try to get a clearer picture of what the coming year has in store for retail and the U.S. economy.
According to a survey by LSEG, formerly known as Refinitiv, Wall Street analysts expect the following:
- Earnings per share: $1.65
- Revenue: $170.71 billion
As the nation’s largest retailer and private employer, Walmart often serves as a barometer for how consumers think about their finances and how they deal with challenges like increased grocery prices. The company will also kick off big retail earnings season.
Walmart said in November that it expected full-year adjusted earnings per share of $6.40 to $6.48. The company also expects consolidated net sales to increase 5% to 5.5%, also an increase from the previous range.
There are early indications that broader trends could bode well for Walmart’s fourth quarter. According to the National Retail Federation, holiday sales rose 3.8% year-over-year to $964.4 billion. These numbers are calculated in November and December but exclude sales at car dealers, gas stations and restaurants.
On the other hand, consumer spending fell more than expected in January, according to the Commerce Department. This may indicate that shoppers paused purchases beyond essentials as holiday bills came due.
Walmart has weathered high inflation better than many other retailers. The company used its reputation to attract families of all income levels and explored new ways to make money, such as selling ads, expanding its third-party marketplace and offering a subscription-based program called Walmart+.
While many other companies have announced cost cuts, Walmart has done the opposite. In late January, the company announced plans to open or expand more than 150 stores in the U.S. over the next five years. This comes in addition to an ambitious plan to modernize more than 1,400 of its existing Walmart stores, giving them a more modern look.
Along with these store investments, Walmart announced it would increase store manager pay to an average of $128,000 per year and make managers eligible for a bonus of up to 200% of their base salary.
In late January, the company also announced a 3-for-1 stock split as shares hovered near all-time highs.
Still, Walmart said the coming year could bring new complexities. CEO Doug McMillon told investors in a November earnings call that deflation could occur as prices for general merchandise and groceries fall. Those lower prices would likely hurt Walmart’s sales, but could free up cash for customers to buy more necessities.
Walmart shares closed at $170.36 on Friday, up about 8% this year. The stock has outperformed the S&P 500, which rose about 5% over the same period.
This story is developing. Please check back for updates.
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2024-02-20 05:01:01
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