Walmart reports its earnings before the bell. Here’s what to expect

Walmart will report quarterly earnings on Thursday, as investors and economists seek clarity about the health of American households and the outlook for the broader economy.

Here’s what analysts are expecting for the big-box retailer, according to consensus estimates from LSEG:

• Earnings per share: 65 cents
• Revenue: $168.53 billion

As the nation’s largest retailer, Walmart is uniquely positioned to offer insights into where the consumer is spending and scrimping. The company’s reputation for value has boosted sales over the past two years, as inflation drove more higher-income shoppers to its stores and website.

Inflation has moderated and returned to historic levels, according to July data from the U.S. Department of Labor. The consumer price index, which measures prices of a broad mix of goods and services, rose 2.9% last month compared to a year earlier. That is the lowest level since March 2021.

Yet prices are hovering much higher than the pre-pandemic period, frustrating and stretching consumers. A jobs report from the Labor Department early this month also raised concerns and prompted a sharp stock market sell-off, as growth slowed and the unemployment rate rose more than expected.

Some companies’ earnings reports have added to worries about the economy. Home Depot on Tuesday beat quarterly expectations for earnings and revenue but warned of slow sales in the back half of the year and consumer caution, even among its more middle- and upper-income customer base.

Walmart CEO Doug McMillon and finance chief John David Rainey have said quarter after quarter that consumer behavior has been consistent, as shoppers seek value and are selective about how they spend.

Steve Shemesh, a retail analyst at RBC Capital, said he and other investors will be eager to hear if that’s still the case.

“We will be looking for any kind of change in tone,” he said.

Walmart, with its value reputation and huge grocery business, is typically more resilient than peers in a challenging economy, since customers will turn to its stores to stretch their dollars when times are tight. The company said in May that it expects to be on the high end or slightly above its full-year guidance, which calls for net sales growth of 3% to 4% and adjusted earnings per share of between $2.23 and $2.37.

If Walmart disappoints in the quarter, that could set off alarm bells, Shemesh said.

“The broader investment community would read into that as ‘Walmart is challenged. Everyone else is likely to be even more challenged than that,'” he said.

On the other hand, he said, investors will have to parse the earnings report carefully if Walmart surpasses expectations.

“If Walmart beats, your gut would tell you ‘OK, Walmart beats. The consumer is fine,’ he said. But, he added, the company’s strong performance could come from even affluent shoppers becoming more reliant on Walmart for a larger range of goods.

Along with attracting inflation-weary shoppers, Walmart has made its own moves to drive growth. It’s looked outside of traditional retail channels, as it’s sought to add more sellers to its third-party marketplace, sell more advertisements and attract more members to its subscription service, Walmart+. It also launched a new grocery brand, Bettergoods, with most items under $5 — including meal solutions like frozen pizzas and chicken wings that could be a cheaper alternative to fast food.

Shares of Walmart closed Wednesday at $68.66. So far this year, the company’s stock is up nearly 31%, outpacing the approximately 14% gains of the S&P 500.