Walmart Q1 Earnings Preview: Expanding Gross Margin, New Profit Streams, and Strategic Investments Amid Consumer Uncertainty

Miami, Florida, Florida, USA United States of America
Approximately 60% of Walmart's sales come from groceries, but inflationary pressures have caused a deceleration in sales growth.
The company plans to open 150 new outlets and modernize 1,400 stores over the next five years, as well as acquire smart TV maker Vizio for $2.3 billion.
Walmart is expanding its total gross margin to 24.8% due to new profit streams like digital advertising and third-party marketplace fees.
Walmart is expected to report Q1 earnings with EPS of 52 cents and revenue of $159.4 billion, representing a 4.7% increase YoY.
Walmart's strategy of targeting more affluent consumers may help it weather any potential consumer pullback.
Walmart Q1 Earnings Preview: Expanding Gross Margin, New Profit Streams, and Strategic Investments Amid Consumer Uncertainty

Walmart, the world's largest retailer and a bellwether for consumer spending, is set to report its first quarter earnings on Thursday. The company is expected to release earnings per share of 52 cents on revenue of $159.4 billion, representing an increase year over year of 4.7%. Walmart has been growing in digital advertising, third-party marketplace fees, and fulfillment services, which carry much higher margins than its core retail business.

Approximately 60% of Walmart's annual domestic sales come from groceries. Despite a deceleration in sales growth due to inflationary pressures and an uncertain economy, the company is expected to expand its total gross margin in the quarter to 24.8%. This expansion is driven by these new profit streams.

Walmart has also been investing in other areas, such as opening new outlets and modernizing existing stores. The company plans to open 150 new outlets and modernize 1,400 stores over the next five years. It recently announced a $2.3 billion acquisition of smart TV maker Vizio to expand its advertising opportunities in the electronic sales market.

Consumer spending resilience has been indicated by recent earnings reports from travel-related companies, but some analysts have warned of cracks emerging among lower-income shoppers. Walmart's strategy of targeting more affluent consumers by prominently displaying higher-quality, higher-priced items and launching its premium grocery brand, Bettergoods, may help the company weather any potential consumer pullback.

The retail earnings season is underway and will shed more light on the health of American consumers and the strength of the industry. Investors will be closely watching Walmart's financial forecast for guidance on the quarter and year ahead.


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Confidence

90%

Doubts
  • Are there any potential risks or challenges that could impact Walmart's financial performance in Q1 beyond inflationary pressures and consumer uncertainty?
  • What specific initiatives has Walmart taken to target more affluent consumers, and how successful have they been so far?

Sources

96%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Dow Giant Has Earnings Due With 'Consumer Cracks Emerging'

Investors.com Financial News Site Analysis - Comprehensive Report on Market Coverage and Analysis - Overall Rating: 90/100 (Highly Reliable, Informative, and Engaging Source of Financial Information). Investor's Business Wednesday, 15 May 2024 23:07
  • Unique Points
    • Approximately 60% of Walmart’s annual domestic sales come from groceries.
    • Grocery sales have helped offset declines in general merchandise for Walmart.
    • Consumer spending resilience indicated by latest earnings from travel-related companies.
  • Accuracy
    • Walmart has attracted more frequent and new shoppers amid price inflation.
    • Wall Street projects full-year earnings per share of $2.37, a 7% rise for Walmart.
  • Deception (95%)
    The article contains selective reporting as it only mentions the consumer pullback from Home Depot and not any positive signs from other companies. It also uses emotional manipulation by implying that 'consumer cracks are emerging' which could potentially scare readers into making investment decisions based on fear.
    • But Savita Subramanian recently warned that ‘consumer cracks are emerging’, especially among lower-income shoppers.
    • The Walmart earnings report comes after Home Depot (HD) signaled a consumer pullback Tuesday, with lower revenue and store traffic in its latest quarter.
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

98%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Walmart will report earnings before the bell. Here's what to expect

CNBC News Melissa Repko Thursday, 16 May 2024 04:01
  • Unique Points
    • Walmart expects sales to grow in Q1 and FY2024.
    • The company anticipates consolidated net sales will rise by 4% to 5% in Q1.
    • Walmart has been cutting costs and investing in other areas.
    • The company announced it will acquire smart TV maker Vizio for $2.3 billion.
  • Accuracy
    • Wall Street expects Walmart to have an EPS of 52 cents adjusted.
    • Market consensus expects an improvement in earnings per share and revenue compared to the same period last year.
    • Approximately 60% of Walmart’s annual domestic sales come from groceries.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

80%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Walmart Earnings Preview: Consolidation Trend Breakout Imminent Ahead of Results

Investing.com Financial Markets Platform Damian Nowiszewski Thursday, 16 May 2024 08:10
  • Unique Points
    • Walmart is targeting more affluent consumers by prominently displaying higher-quality, higher-priced items and launching its premium grocery brand, Bettergoods.
    • The company plans to open 150 new outlets and modernize 1,400 stores over the next five years.
  • Accuracy
    • The stock could break out of its consolidation in the coming days, driven by the company’s first-quarter 2024 results.
    • Market consensus expects an improvement in earnings per share and revenue compared to the same period last year.
    • Walmart benefits from inflation remaining above 3% as it attracts price-conscious customers.
  • Deception (30%)
    The article contains selective reporting and emotional manipulation. The author mentions the potential for a stock price breakout based on earnings results, but only mentions downward revisions without providing context or mentioning upward revisions. This is selective reporting. Additionally, the author states that 'Consistently above-target inflation in the U.S. is a major concern not only for Federal Reserve officials but also for a wide range of lower-income consumers.' This statement is emotionally manipulative as it plays on readers' fears and assumptions about inflation and its impact on lower-income individuals.
    • Consistently above-target inflation in the U.S. is a major concern not only for Federal Reserve officials but also for a wide range of lower-income consumers.
    • Despite a solid 13% year-to-date gain, Walmart (NYSE:) has spent the past couple of months trading sideways within the $58-62 per share range. The stock could break out of this consolidation in the coming days, driven by the company’s first-quarter 2024 results, scheduled for release tomorrow before the opening bell.
  • Fallacies (85%)
    The author makes several statements that contain potential informal fallacies. Firstly, in the sentence 'Despite a solid 13% year-to-date gain, Walmart (NYSE:) has spent the past couple of months trading sideways within the $58-62 per share range,' there is an appeal to authority with 'InvestingPro' being cited as a source. However, this does not necessarily mean that the information provided is accurate or true. Additionally, in the sentence 'If numbers disappoint, we may be looking at the stock moving toward the mid-$55 range,' there is a prediction based on potential future events without sufficient evidence to support it. Lastly, in several instances throughout the article, there are uses of inflammatory rhetoric such as 'major concern' and 'significant competition.' These statements do not add any value to the analysis and can be considered unnecessary.
    • ]Despite a solid 13% year-to-date gain, Walmart (NYSE:) has spent the past couple of months trading sideways within the $58-62 per share range.[
    • If numbers disappoint, we may be looking at the stock moving toward the mid-$55 range.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

97%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

What Walmart earnings could tell us about consumer spending

Yahoo Finance Madison Mills Thursday, 16 May 2024 08:10
  • Unique Points
    • Walmart is the world's largest retailer and a bellwether for consumer spending
    • Approximately 60% of Walmart’s annual domestic sales come from groceries.
    • Despite a deceleration in sales growth, total gross margin is expected to expand to 24.8%
  • Accuracy
    • Wall Street expects earnings per share of $0.52 on revenue of $159.4 billion
    • Analysts expect Walmart’s gross margin to expand due to growth in digital advertising, third-party marketplace fees, and fulfillment services
    • Approximately 60% of Walmart’s annual domestic sales come from groceries
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (95%)
    The author makes several valid statements without any fallacies. However, there are a few instances of appeals to authority when the author quotes analysts' expectations and opinions. These appeals do not detract significantly from the overall quality of the article and do not warrant a lower score.
    • ][Cfras Arun Sundaram] expects the company's total gross margin to actually expand in the quarter to 24.8%.[/
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication