An Inside Look at Retail Earnings: Walmart (WMT)

Retail earnings kicked off with Walmart announcing their results before today’s open.

Grocery retailer Walmart (WMT), beat earnings and revenue consensus reporting Q4 EPS of $1.71 vs $1.52 and Q4 revenues $164.05B vs 159.76B. The company provided weak Q1 guidance that indicated EPS $1.25-1.30 ex-items vs FactSet $1.37 [29 est, $1.19-1.57]; includes an expected $0.03 impact from LIFO, consolidated net sales +4.5-5.0% y/y constant currency and consolidated operating income +3.5-4.0% y/y constant currency, negatively impacted by 235 bps from LIFO.

While Walmart reported positive numbers for the quarter, the outlook ahead for the coming year looks to be challenging for the mega retailer. Even more interesting, the stock opened under pressure due to its disappointing guidance however, mid trading day, its downward trend reversed as bulls bought the dip and share price rose. The varied selling and buying indicates a mixed investor sentiment. While some are cautious around the economic outlook others are bullish on the indication Walmart provided regarding its increased market share that has captured higher income shoppers who are now flocking to the discount retailer, during this inflationary period.

Walmart closed the trading day at $147.33. 0.6% higher from its opening price of $142.88.

US equities were lower in Tuesday trading. Some contributors to the overall market decline were continued discussion around stocks ability to remain resilient through a meaningful rate repricing while the earnings calendar proved to be another drag with a fairly disappointing start to retail announcements. The S&P 500 posted worst session since Dec 15th and ended below 4000 for the first time since Jan 20th.  US indices ended the day down – S&P 500 (2.00%), Dow (2.06%), Nasdaq (2.50%), and Russell 2000 (2.99%).

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An Inside Look at Retail Earnings: Walmart (WMT)

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