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Walmart (WMT) Q1 2023 Earnings

Workers move carts outside a Walmart store in Lakewood, California, USA on Sunday, May 15, 2022.

Bing Guan | Bloomberg | Getty Images

Walmart will report earnings Tuesday ahead of the call as investors and economists look for clues about how U.S. consumers are handling inflation — and whether they’ve begun cutting spending.

Here’s what Wall Street expects from the company in the first fiscal quarter, according to Refinitiv’s consensus forecast:

  • Earnings per share: $1.48 expected
  • Revenue: $138.94 billion expected

Sales by Walmart, the nation’s largest retailer, may reflect broader economic trends and consumer sentiment. For example, when Americans received their first doses of the Covid-19 vaccine a year ago, a major retailer said it saw a surge in sales of personal care, holiday and travel-related products, including teeth whitener and new clothes. Now, industry watchers will be looking for signs that shoppers are buying cheaper brands or smaller packages, or skipping out on discretionary items like clothing and electronics.

Walmart’s earnings report is in line with another very popular metric. The government will release retail sales data for April on Tuesday morning. The fresh data will give the markets a “measurement bar,” said Steph Wissink, retail analyst at Jefferies.

“Walmart affects many American consumers,” she said. “It also has very strong momentum for the consumer segment, which tends to be the most sensitive.”

Inflation remains at a nearly four-decade high. consumer price indexThe overall price of goods and services rose 8.3% in April from a year earlier, according to the Bureau of Labor Statistics.

Grocery, Walmart’s main sales category, is one of the hardest hit categories. According to unadjusted BLS data, food prices rose 9.4% in April over the 12 months.

The cost of gas also jumped to a national average of $4.483 a gallon as of Monday, with prices even higher on the West Coast and Northeast, according to the AAA. Gas station prices began to rise noticeably in March, when Russia was at war with Ukraine.

Inflation is expected to boost Walmart’s sales as shoppers turn to the retailer for its connoisseur reputation, said Chris Horvers, a retail analyst at JP Morgan. However, he said the discounter faces long-term risks if low-income households buy only essentials or if it has to incur losses to keep prices low.

“Walmart is in a moment where they are gaining share,” he said. “If the situation remains as it is now, you will have to see Walmart start investing in price, and at the same time you could – for the bottom [income] funnel – losses due to more discretionary categories, as well as some consumers moving from Walmart to the dollar store channel.

Walmart shares closed on Monday at $148.21. The stock is up about 2.5% this year, outperforming the market as a whole as investors look for essentials amid economic uncertainty. The market capitalization of the company is nearly $408 billion.

This story is evolving. Please stay tuned for updates.


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