Walmart Poised for Strong Quarter as Shoppers Seek Value

Company Overview

Walmart (WMT) is set to release its fourth-quarter and fiscal 2025 results on Thursday, fueling expectations of continued solid performance amidst ongoing inflation. Analysts anticipate the retail giant's revenue and adjusted earnings per share to reach $180.21 billion and $0.65, respectively. Same-store sales in the US are projected to surge by 4.66%.

Factors Driving Growth

According to Jefferies analyst Corey Tarlowe, Walmart's focus on value and convenience has attracted higher-income shoppers, contributing to expected above-target results. Additionally, the expansion of its online marketplace and improvement in discretionary purchases are seen as catalysts for growth.

Deutsche Bank analyst Krisztina Katai predicts record membership penetration for Walmart+ in the second half of 2024 and into January 2025. She also highlights the company's defensive product mix and financial flexibility as strengths.

Expected Earnings Breakdown

For its fourth quarter, Walmart is forecast to report the following:

* Revenue: $180.21 billion (vs. $173.39 billion previous year)
* Adjusted EPS: $0.65 (vs. $0.60 previous year)
* US Same-Store Sales Growth: 4.66% (vs. 3.9% previous year)
* Walmart US Same-Store Sales Growth: 4.36% (vs. 4% previous year)
* Foot Traffic Growth: 2.67% (vs. 4.3% previous year)
* Ticket Growth: 1.96% (vs. -0.3% previous year)
* E-commerce Sales Growth: 2.88% (vs. 2.4% previous year)
* Sam's Club US Same-Store Sales Growth: 4.99% (vs. 3.1% previous year)

Fiscal Year 2025 Outlook

For fiscal year 2025, Bloomberg consensus estimates project:

* Revenue: $680.70 billion (vs. $648.13 billion previous year)
* Adjusted EPS: $2.49 (vs. $2.33 previous year)
* US Same-Store Sales Growth: 4.63% (vs. 5.5% previous year)
* Walmart US Same-Store Sales Growth: 4.62% (vs. 5.6% previous year)
* Sam's Club US Same-Store Sales Growth: 5.35% (vs. 4.8% previous year)

Stock Performance and Analyst Sentiment

Walmart's stock has outperformed the S&P 500 over the past year, rising by over 75%. Analysts remain bullish, with Joe Feldman of Telsey Advisory Group predicting the company's continued leadership in market share gains. Analyst Corey Tarlowe also sees potential upside in Walmart's services and automation initiatives.

Competitive Advantages

Walmart's domestic production and assembly operations provide it with a competitive advantage in mitigating potential tariff impacts. Its focus on affordability, particularly through its private labels, is expected to buffer consumers against rising prices.