WMT

Walmart Inc.

122.63
USD
0.86%
122.63
USD
0.86%
117.27 160.77
52 weeks
52 weeks

Mkt Cap 341.95B

Shares Out 2.79B

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Walmart Stock: What To Know Ahead Of Upcoming Earnings

When Does Walmart Report Earnings? Walmart (NYSE:WMT) reports Q1 fiscal 2023 earnings on Tuesday, May 17th, before the market opens. Investors can find the release here and listen to the related conference call, which will start at 8:00 a.m. Eastern time. The company is expected to report earnings-per-share (EPS) of $1.49 on just over $138 billion in sales. Walmart has beaten estimates in the last four quarters. Walmart is so steady you could almost set your watch to it. And that isn't a bad thing, especially given the current topsy-turvy market. The stock also benefits investors looking for cover as tech stocks fall and speculative names capitulate. The consumer staple sector often outperforms the broader market during uncertainty and inflation. Walmart has several irons in the fire. John Rainey was recently hired as Walmart's CFO and Executive Vice President in a move seen as a precursor to things to come. Rainey recently held similar roles at fintech company PayPal (PYPL), and his experience in tech is seen as a window into Walmart's plans. Walmart is looking to continue to give its eCommerce business a jolt. In Q4 FY22, U.S. eCommerce sales grew 1%, while overall sales rose 5.7%. This doesn't tell the entire story, however. Over the prior two years, eCommerce sales increased 70% due to the pandemic. The trick will be keeping up the momentum. Walmart is also expanding its DSP Walmart Connect in partnership with The Trade Desk (TTD). Offering advertisers a unique marketing opportunity could be a lucrative area for growth. Grocery sales are another area to watch. Walmart U.S. has seen mid-teens growth over the last two years in this area. Rising prices could be a further catalyst, with Walmart being a lower-cost option. This could allow the company to convert some customers from brands like Kroger (KR) and Albertsons (ACI) as Americans pinch pennies. Walmart's international sales have been falling primarily due to divestitures on the international front. Disinvestments aside, sales last quarter grew 9.1%. International growth and especially digital sales in international markets are areas the company is capitalizing on. In fact, more than 20% of international sales are digital. Sam's Club is a growth catalyst to watch. Comparable sales were up 16% last quarter year-over-year, while membership income grew just over 9%. Inflation could be a growth driver here as well. On the financial front, margins will be interesting. Walmart has committed resources to invest in its truck drivers, including higher wages and training. This connects directly to its focus on eCommerce. More digital sales mean more trucking needs. Rising costs for inventory could also crimp margins. However, Walmart has significant industry pricing power. This is why its operating margin and gross profit margin have been steady for over a decade, as shown below. Walmart has not sacrificed profitability to achieve growth. The company is well managed and disciplined. Walmart's dividend is as safe and steady as they come, with a current yield of 1.5%. The dividend has grown for the last 48 years. The current yield is not the best around; however, the predictable growth is attractive for risk-averse dividend growth investors. I rated Walmart stock as a buy in a previous article mainly due to the macroeconomic picture. Since then, the stock has gained 10%, although it was up as much as 19% before the recent pullback. Because of the sharp recent gains, Walmart now receives a hold rating. Wall Street is bullish on Walmart stock with 28 buys or strong buys and ten hold ratings according to Seeking Alpha's Wall Street Ratings. The ratings have gotten more bullish since January. This is almost certainly in response to macroeconomic indicators. This article was written by My philosophy is to invest in equities with focus on companies which produce generous amounts of positive cash-flow and have growth opportunities to benefit medium to long-term investors. I have a diversified portfolio including growth and value equities, REITs, dividend stocks, and like to use options for income when the opportunity arises. I have over 15 years of experience in the market. I am a practicing CPA, however I have learned about investing more from avid reading, market watching, experience, and of course making mistakes over the years. Also, am an admitted Excel junkie. I try to remember Mark Twain's wisdom: "It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so"Thank you very much for reading and please feel free to leave me a message in the comments or send a private message. All the best! Disclosure: I/we have a beneficial long position in the shares of TTD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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