Walmart will report earnings before the bell — here’s what to expect

Walmart on Tuesday will report its fiscal third-quarter earnings before the bell, as the retail giant caters to inflation-squeezed customers and gears up for the peak of holiday season.

Here’s what Wall Street is expecting for the quarter, according to Refinitiv consensus estimates:

• Earnings per share: $1.32 expected
• Revenue: $147.75 billion expected

Walmart and its competitors are navigating a more challenging backdrop than during the previous two years. Inflation is near four-decade highs. Excess inventory is clogging up store backrooms and warehouses. And consumers are spending money on travel, amusement parks and more as Covid concerns fade.

To drum up sales, Walmart, Amazon, Target and other retailers have kicked off the holiday season early. Walmart threw its own sales event in October to coincide with Amazon’s second Prime Day-like sales event of the year. Walmart is also spreading out Black Friday deals well ahead of the day after Thanksgiving, with fresh promotions dropping every Monday in November.

As inflation runs hot, however, Walmart may benefit from its strength in grocery and reputation for low prices. It is the largest grocer in the country, with about 56% of its annual revenue coming from groceries last fiscal year.

Already, Walmart has said it has drawn new and higher-income customers. In August, Walmart Chief Financial Officer John David Rainey told CNBC that about three-quarters of Walmart’s market share gains in food came from customers with annual household incomes of $100,000 or more. 

By dangling cheaper groceries and essentials, Walmart hopes it can also nudge shoppers across the aisle to buy clothes, toys and other items.

Inflation has taken a toll on the discounter, however. Walmart cut its full-year profit outlook in July, saying shoppers are buying fewer discretionary items as they spend more on necessities.

It said it expects same-store sales for Walmart U.S. to grow by about 3%, excluding fuel, for the second half of the year, or about 4% for the full year. It anticipates adjusted earnings per share will decline between 9% and 11% for the full year.

Shares of Walmart are down about 4% so far this year, outperforming the approximately 17% drop of the S&P 500 index. The company’s shares closed Monday at $138.39, bringing Walmart’s market value to about $375.62 billion.