Walmart expected to post another strong earnings report ahead of the holiday season
11/18/2024 21:39Value-seeking shoppers continue to provide a boost for Walmart.
The good times are expected to keep rolling at Walmart (WMT) as inflation-weary shoppers continue their search for value.
Wall Street projects the world's biggest retailer will continue to see gains across all product categories and income cohorts when it reports Q3 FY2025 results on Tuesday. Its "strong value offering & high digital convenience" continues to resonate, per a note from Bank of America analyst Robby Ohmes.
For the quarter, the Street expects Walmart to post revenue of $160.8 billion, alongside adjusted earnings per share of $0.53. It's likely gaining in foot traffic, with strength in its health and wellness segment and groceries.
Groceries make up 60% of US sales for Walmart. It's maintained an edge in value, offering prices that are about 10% to 12% cheaper for an average basket of food, Goldman Sachs analyst Kate McShane told Yahoo Finance.
Its strategy is even "giving Amazon a lot of competition," LSEG Director of Consumer Research Jharonne Martis told Yahoo Finance.
"They're giving the consumer the ability to shop the way they want to, whether it be ordering it on your mobile... and picking it up at the store on your way home or just having it delivered right there from the store to your house," Martis told Yahoo Finance.
Shares of the retailer are outpacing its peers, up more than 60% year-to-date. That's compared to Target, (TGT) where shares are up just 7%, or the S&P 500, which is up 24%.
Walmart's also working on alternate revenue streams including membership models like Walmart+ and its advertising revenue, Walmart Connect.
Its e-commerce marketplace is "getting very close to being profitable," said McShane.
"There's more buy-in from the investor base [in] the alternative revenue streams that Walmart's been going after... that they are faster-growing and higher-margin businesses that should drive better profitability for the company longer term," McShane said.
Ohmes said with a shortened selling season, five fewer days between Thanksgiving and Christmas compared to last year, it "will likely lead to higher online spend, favoring large digital and omni-channel players like Walmart."
CFO John David Rainey told Yahoo Finance following its previous quarterly report that back-to-school sales are off to a good start, which is typically a good indicator of how the holiday season will perform.
Here's what Walmart is expected to post for its 2025 third quarter, compared to Q3 of the prior fiscal year, according to Bloomberg consensus estimates:
Revenue: $167.5 billion versus $160.8 billion
Adjusted earnings per share: $0.53 versus $0.51
Overall same-store US sales growth: 3.81% versus 4.70%
Walmart US same-store sales growth: 3.68% versus 4.90%
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Traffic: 2.82% versus 3.40%
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Ticket growth: 1.20% verus 1.50%
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E-commerce growth: 2.22% versus 3.00%
Sam's Club US same-store sales growth: 4.22% versus 2.90%
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].