A Walmart in Atlanta, Georgia, on Sunday, February 19, 2023.
Dustin Chambers | Bloomberg | fake images
Walmart will report its Christmas quarter results on Tuesday morning, as investors try to get a clearer picture of what next year holds for retailers and the U.S. economy.
Here's what Wall Street analysts expect, according to a survey by LSEG, formerly known as Refinitiv:
- Earnings per share: $1.65
- Revenue: 170.71 billion dollars
As the country's largest private retailer and employer, Walmart often serves as a barometer for how consumers feel about their finances and how they handle challenges like high grocery prices. The company will also begin the important earnings season for the retail industry.
Walmart said in November it expected full-year adjusted earnings per share of between $6.40 and $6.48. It also said it anticipates consolidated net sales to increase between 5% and 5.5%, also an increase from its previous range.
There are early signs that broader trends may bode well for Walmart's fourth quarter. Holiday sales rose 3.8% year over year to $964.4 billion, according to the National Retail Federation. Those figures are tallied during November and December, but exclude sales at car dealerships, gas stations and restaurants.
On the other hand, consumer spending fell more than expected in January, according to the Commerce Department. It may indicate that shoppers have paused purchases beyond necessities as holiday bills come due.
Walmart has weathered high inflation better than many other retailers. It has used its reputation for value to attract families of all income levels and has leaned into new ways to make money, such as selling ads, expanding its third-party marketplace and offering a subscription-based program called Walmart+.
As many other companies have announced cost cuts, Walmart has done the opposite. In late January it announced that it would open or expand more than 150 stores in the United States over the next five years. This is in addition to an aggressive plan to update more than 1,400 of its existing Walmart stores to have a more modern look.
Along with those investments in stores, Walmart said it would increase store manager salaries to an average of $128,000 per year and make managers eligible for a bonus of up to 200% of their base salary.
It also announced a 3-for-1 stock split in late January, as the stock hovered near an all-time high.
Still, Walmart said next year could bring new complexities. Chief Executive Doug McMillon told investors on a November earnings call that deflation could set in as general merchandise and grocery prices fall. Those lower prices would likely hurt Walmart's sales numbers, but they could free up cash for customers to buy more discretionary items.
Walmart shares closed Friday at $170.36, up about 8% so far this year. The stock has outperformed the S&P 500, which is up about 5% over the same period.
This story is developing. Please check for updates.
