Walmart Inc. WMT is likely to register top and bottom-line growth when it reports second-quarter fiscal 2025 earnings on Aug 15. The Zacks Consensus Estimate for revenues is pegged at $168.43 billion, which indicates a 4.2% increase from the year-ago period.
The consensus mark for earnings has remained unchanged in the past 30 days at 65 cents per share, which implies 6.6% growth from the year-ago quarter’s figure. WMT has a trailing four-quarter earnings surprise of 8.3%, on average.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Walmart this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Though Walmart currently carries a Zacks Rank #2, it has an Earnings ESP of -0.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors to Note
Walmart has been benefiting from the strength of its highly diversified business, with contributions spanning various segments, markets, channels and formats. The company has been witnessing an increase in both in-store and digital channel traffic, reflecting its adept navigation of the evolving retail landscape. The company's commitment to innovation and adaptability, particularly in the e-commerce space, has been a major driver. Gains from higher-margin ventures, such as advertising, are also noteworthy. Upsides like these are likely to contribute to second-quarter results.
A strong omnichannel business has been working well for Walmart. The integration of online and offline channels, including services like in-store pickup, same-day delivery and ship-from-store options, has helped it provide a seamless shopping experience for customers both domestically and internationally. Additionally, the company has been undertaking several efforts to enhance merchandise assortments. These strategies boost Walmart's competitive advantage, enabling it to reach a broader customer base and drive higher sales volumes.
Many other retailers like Kroger KR, Costco COST and Target TGT have also been sharpening their omnichannel edges to stay firm in the game.
Coming back to Walmart, the company’s strategic investments in technology and e-commerce have positioned it as a formidable competitor in the online retail space. Initiatives like Walmart GoLocal, Walmart Luminate, Walmart Connect and Sam’s Club MAP demonstrate Walmart's commitment to enhancing customer experience and operational efficiency.
Moreover, Walmart's delivery capacities and services have set a new standard in retail logistics, combining efficiency with customer-centric innovation. With its Walmart+ membership program and services like Express Delivery, the company has bolstered its delivery capabilities, which have been a key e-commerce driver.
In the first quarter of fiscal 2025, global e-commerce sales surged 21% on store-fulfilled pickup & delivery and marketplace and formed 18% of Walmart’s overall net sales. E-commerce penetration increased across all markets. The continuation of this trend is likely to have boosted Walmart’s second-quarter performance, helping the company counter high operating expenses.
Price Performance & Valuation
Walmart’s unmatched scale and operational prowess have helped it outperform the industry and the broader market over the past year. Shares of this omnichannel retailer have rallied 27.4% in a year compared with the industry’s 25.6% growth. Meanwhile, the broader Zacks Retail-Wholesale sector and the S&P 500 witnessed respective increases of 9.6% and 18.7% in the same time frame.
Image Source: Zacks Investment Research
Walmart is currently trading at a forward 12-month P/E ratio of 26.56, exceeding the industry average of 24.87 as well as the S&P 500’s 20.65. We believe that this premium valuation reflects the company's successful track record and investors' willingness to pay for its expected growth and stability.
Image Source: Zacks Investment Research
Investment Thesis
Walmart has long stood as a titan in the retail industry. The company's robust omnichannel approach seamlessly integrates its expansive brick-and-mortar presence with a thriving e-commerce platform, catering to a broad spectrum of consumer preferences. A key element of Walmart's success is its diversification strategy, which extends beyond traditional retail into areas like advertising, unlocking new revenue streams.
Further, the company’s business stability, bolstered by strong financial health, underscores a commitment to delivering consistent shareholder returns. With its multifaceted growth strategies and unwavering commitment to excellence, Walmart is well-positioned to continue its upward momentum, making it an attractive choice for investors at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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See This Stock Now for Free >>Target Corporation (TGT) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
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