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

Bin Guan | Bloomberg | Getty Images

Walmart will report earnings Tuesday before the call as investors and economists seek clues as to how U.S. consumers are tolerating inflation – and whether they have begun cutting costs.

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

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

As the nation’s largest retailer, Walmart sales can reflect broader economic trends and consumer sentiment. For example, when Americans received their first doses of vaccines against Covid-19 a year ago, a major retailer said it was seeing growth in sales of personal care products, holidays and travel, including teeth whitening and new clothing. Now industry observers will look for signs that shoppers are trading for cheaper brands or smaller packaging or skipping electives such as clothing and electronics.

Walmart’s earnings report coincides with another popular metric. The government will announce retail sales figures for April morning on Tuesday. Fresh data will give the market a “wand,” said Steph Visink, a Jefferies retail analyst.

“Walmart affects many American consumers,” she said. “It also has a very strong pulse in the consumer segment, which is usually the most sensitive.”

Inflation remains at a maximum of almost four decades. According to the Bureau of Labor Statistics, the consumer price index – a broad indicator of prices for goods and services – in April increased by 8.3% over the same period last year.

Grocery, Walmart’s main sales category, is one of the most affected categories. In April, for 12 months, food costs rose by 9.4%, according to unadjusted TBM data.

According to the AAA, the price of gas also rose to the national average of $ 4,483 per gallon as of Monday – with prices even higher on the west coast and northeast. Prices for the pump began to rise significantly in March, when Russia was waging war in Ukraine.

Inflation is expected to boost Walmart sales as buyers turn to retailers because of its reputation value, said Chris Horvers, a retail analyst at JP Morgan. However, he said, in the long run, the discounter faces risks when low-income households buy only necessities or when they have to strike at profits to keep prices low.

“Walmart is at a time when they are gaining a stake,” he said. “If the environment stays the way it is, you’ll have to see how Walmart starts investing in price, and at the same time you could do it – at the bottom [income] funnel – a loss around more discretionary categories, and some consumers are trading with Walmart in the dollar store channel. “

Shares of Walmart closed Monday at $ 148.21. Shares have risen about 2.5% this year, outpacing the broader market as investors look for consumer staples amid economic uncertainty. The company has a market capitalization of nearly $ 408 billion.

This story is evolving. Please check for updates.

Source by [author_name]

Previous articleRangers chased Cindergaard at 6am 1, beat Angels 7-4
Next articleHome Depot (HD) revenue for the 1st quarter of 2022