Walmart earnings are tomorrow. Here’s what to watch
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Walmart (WMT-0.30%) has figured out how to attract high- and low-income consumers, even amid economic uncertainty.
The retail giant is set to report third-quarter earnings on Tuesday morning before the markets open, and its quarterly results could set the tone for other major retailers like Target and Lowe’s, which also release earnings this week. Walmart’s performance could provide insight into how consumers are managing inflation and rising costs.
Experts say that as shoppers seek bargains, Walmart’s low-cost offerings continue to attract price-sensitive customers, putting the retailer in a strong position to win.
“Walmart has found a sweet spot where they’re satisfying higher-income households looking to save on groceries, while also appealing to lower-income consumers seeking the best value possible,” said Greg Zakowicz, senior e-commerce expert at software company Omnisend.
Bank of America (BAC-0.14%) shares a similar optimistic outlook, forecasting a potential upside. The firm estimates 3.5% growth in U.S. comparable sales —slightly below consensus expectations — but notes that recent data show strong momentum for the retailer. BoA also expects Walmart to continue expanding its gross margin, driven by its digital advertising, fulfillment services, and third-party marketplace.
Walmart’s low prices and the growing popularity of its membership program Walmart+ have allowed it to tap into both ends of the consumer market. While premium customers seek convenience on everyday essentials, Walmart’s budget-friendly offerings continue to resonate with shoppers tightening their belts. BoA notes that the company’s investment in e-commerce and improvement of its omni-channel shopping, including curbside pickup and delivery, are helping it stay competitive as consumer shopping habits shift.
An early start to the holiday shopping season this year could further benefit the retailer. With many consumers starting their holiday purchases earlier than usual, Walmart stands to see an uptick in non-grocery sales, including apparel, electronics, and home goods. These products are among those featured in the company’s upcoming Black Friday sales.
Walmart, the largest U.S.-based retailer, has seen a 0.9% increase in year-over-year visits during the third quarter, according to foot traffic analytics firm Placer.ai. However, it’s closest competitor, Amazon (AMZN-0.45%), remains the “lowest-price” retailer, according to a study conducted by e-commerce analytics platform Profitero.
In other news, Walmart has started locking up certain items, such as deodorant and baby formula, due to theft concerns. However, the retailer is exploring solutions, like smartphone access to unlock products for customers.
In late October, Walmart said it would same-day prescription delivery. The service is currently available in six states, with plans to expand to nearly all states by January 2025.
