Walmart Earnings Preview: Analysts Anticipate Strong Profits Amid Online Sales Surge and Competition from Amazon

As Walmart prepares to release its first-quarter earnings, analysts predict a nearly 6% increase in net income for the period ending April 30. This follows a surge in online sales driven by demand for cheaper products, particularly in categories such as personal care, clothing, and electronics where Walmart faces intense competition from Amazon and newcomers like PDD Group’s Temu. However, higher than average inventory levels may pose a challenge for Walmart, potentially raising costs and impacting profit margins. Despite this, Wall Street anticipates earnings per share of 52 cents, in line with the top end of Walmart’s previous guidance. With the stock currently trading at around 25 times expected earnings, up from a historical average of approximately 20, investors are expecting strong profit growth. B. Riley Wealth’s chief market strategist Art Hogan believes that if Walmart can exceed revenue and earnings expectations, its shares will likely continue to climb. In contrast to the prior year’s spending patterns, Americans are currently exhibiting weaker demand for non-essential, discretionary items, according to a survey by Deloitte. Overall, analysts suggest that Walmart has more positive factors driving its performance than negative ones, providing room for further growth.