Walmart Earnings Preview: Strong Quarter Expected Amid Inflationary Environment

Key Takeaways:

* Walmart (WMT) anticipates another impressive quarter as inflation-conscious consumers seek value options.
* Revenue and adjusted EPS projected to increase, driven by solid same-store sales growth.
* Higher-income shoppers are increasingly attracted to Walmart's value and convenience offerings.
* Membership penetration for Walmart+ expected to reach record levels, contributing to growth.
* Full-year revenue forecast reflects a 5% increase, exceeding previous guidance.
* Investors to focus on 2025 outlook and conservative initial guidance.

Earnings Breakdown (Q4 Results):

* Revenue: $180.21 billion (vs. $173.39 billion)
* Adjusted EPS: $0.65 (vs. $0.60)
* Overall US same-store sales growth: 4.66% (vs. 3.9%)
* Walmart US same-store sales growth: 4.36% (vs. 4%)
* Foot traffic growth: 2.67% (vs. 4.3%)
* Ticket growth: 1.96% (vs. -0.3%)
* E-commerce sales growth: 2.88% (vs. 2.4%)
* Sam's Club US same-store sales growth: 4.99% (vs. 3.1%)

Fiscal Year 2025 Outlook:

* Revenue: $680.70 billion (vs. $648.13 billion)
* Adjusted EPS: $2.49 (vs. $2.33)
* Overall US same-store sales growth: 4.63% (vs. 5.5%)
* Walmart US same-store sales growth: 4.62% (vs. 5.6%)
* Sam's Club US same-store sales growth: 5.35% (vs. 4.8%)

Analyst Commentary:

* Jefferies analyst Corey Tarlowe expects Walmart to surpass expectations due to its appeal to higher-income shoppers.
* Deutsche Bank analyst Krisztina Katai anticipates record-high Walmart+ membership in the next six months.
* Telsey Advisory Group's Joe Feldman believes Walmart will continue its market share gains due to its defensive product mix and technological advancements.

Stock Performance:

* Walmart stock has outperformed the market, rising over 75% in the past year.
* Analysts remain bullish on the stock due to its potential for revenue growth and efficient operations.

Conclusion:

Walmart is well-positioned to deliver another strong quarter and fiscal year, supported by its value-oriented strategy, expanding online presence, and market share gains. Investors should expect above-consensus performance and an upbeat outlook for 2025.