Walmart - what to expect from the results? 📌

Walmart will report its results this Thursday (15.08). From the perspective of investors, they will provide insight into how strong the US consumer currently remains. In all likelihood, Walmart will continue to report strong results due to its defensive nature and exposure to basic goods, which maintain strong sales momentum even in the event of negative economic turmoil. 

The consensus estimate is that the company will report revenue of $168.5 billion (+4.2% y/y), the weakest growth rate since 1Q23/24. At the same time, achieving such a result would be the second highest quarterly revenue in the company's history, which casts a shadow of concern over the company's ability to meet analysts' hopes for it. 

The important data that investors should primarily pay attention to will be comparable sales growth. For the U.S., the estimated comparable sales growth rate is expected to be 3.43% y/y, and the estimated 2-year comparable sales growth rate is expected to be around 9.7%. This represents a deepening deceleration in the growth rate of comparable sales, which was around 13.7% a year ago. This trend has been going on for 3 quarters now.

The growth in the number of newly opened stores will also inform the company's condition. In 2Q24/25, the estimated increase in the number of units is 1.6%, primarily outside the US (+3% y/y).  

At the earnings estimate level, consensus expects EPS to rise to $0.65. 

Currently, futures markets are pricing potential post-earnings volatility around 5.45%. 

The option market's estimate of volatility after the results is in the range of $64.2-$72.3. The implied change of 5.45% represents a 1 p.p. smaller move than we had after the last results, when Walmart positively surprised the market. Source: xStation

2Q24/25 FORECAST RESULTS:

• Revenues of $168.46 billion (+4.23% y/y)
  • Comparable U.S. Walmart store sales (excluding fuel): +3,43%
  • Sam's Club comparable sales in the US (excluding fuel) +3.9%
• 2-year comparable sales growth +9.66% (-4.1 p.p.) 
• Change in US e-commerce sales +16.9% (-7 p.p.) 
• Adj. operating profit $7.76 billion (+6.25% y/y)
• Total number of stores: 10,645 (+1.56% y/y)
  • Number of Walmart stores in the US: 4 611 
  • Number of Walmart stores outside the US: 5 428
• Adj. EPS: $0.65 (+5.22% y/y)