A bellwether reports
A better picture of the U.S. consumer, along with the retail industry at large, will come into focus today as Walmart (WMT) releases its latest earnings report before the market opens. It’s been quite a ride over the past few months due to the uncertainty from the Trump administration’s tariffs, which were raised to exorbitant levels before being pulled back for trade talks. A third of what Walmart sells is brought in from outside the U.S., with China and Mexico noted as the “most significant” import markets.
By the numbers: Analysts expect Walmart to disclose revenue of $164.5B and earnings per share of $0.58, which falls into the company’s Q1 guidance of $0.57 to $0.58 EPS. U.S. comparable store sales are seen rising 3.6% amid the general trend of consumers stocking up on household goods due to prior fears of higher tariff-related prices. Guidance is also expected to be broad enough to encompass a wide range of outcomes. Walmart previously guided for full-year net sales growth of 3% to 4% and adjusted operating income growth of 3.5% to 5.5%, even as the company integrates its VIZIO acquisition and navigates a less favorable category mix.
Investors will be watching for updates on Walmart’s ability to sustain momentum amid ongoing macroeconomic challenges. Other key areas of focus on the conference call will include Walmart’s advertising business, e-commerce performance, inventory management, automation, and supply chain and sourcing strategies. Walmart’s report is seen as holding more weight than normal, as analysts dive into the implications of growing market share by holding back on price increases vs. protecting margins.
Outlook: Options trading implies a 6% move in Walmart’s (WMT) share price after the earnings report is released, which is more implied volatility than usual. Costco (COST), PriceSmart (PSMT), and Five Below (FIVE) are the stocks that closely correlate with Walmart on earnings day, as well as major suppliers like Fabrinet (FN), Kontoor Brands (KTB), and Cal-Maine Foods (CALM), which could additionally see share price reactions. As of Wednesday’s close, WMT shares are up about 7% YTD, compared to the flat performance of the S&P 500 (SP500).
#U.S #Retail #Industry