Walmart (WMT) is expected to deliver another solid quarter, even as cautious consumers become increasingly selective with their money.
For the second quarter of fiscal 2025, America’s largest retailer is expected to report revenue growth of 4.23% to $168.46 billion, while adjusted earnings per share are expected to increase 5.22% to $0.65.
In the U.S., comparable-store sales are expected to rise 3.41 percent, with Sam’s Club up 3.9 percent and its namesake store up 3.43 percent, according to Bloomberg estimates. Grocery remains a key business for Walmart and a major factor in higher foot traffic and higher checkout amounts.
“Food, consumer staples and convenience goods … will continue to be the main driver,” Joe Feldman of Telsey Advisory Group told Yahoo Finance by phone. “People are looking for value, they’re trying to stretch their money.”
UBS analyst Michael Lasser expects that “consumer sentiment has remained constant overall.”
“Remember, Walmart primarily sells groceries and other household products and is gaining market share, so the company’s experience will be a little different from other retailers,” Lasser told Yahoo Finance.
About 60 percent of Walmart’s U.S. sales come from groceries. Last quarter, the company launched a private label called Bettergoods, which offers healthier, higher-quality products for $5.
CFRA analyst Arun Sundaram said the retailer is trying to retain the newly acquired higher-income households by making customers feel: “Hey! This is not the Walmart of 10-15 years ago.”
Result breakdown
Here are Wall Street’s expectations for Walmart’s second quarter of fiscal 2025 compared to the second quarter of last year:
Revenue: $168.46 billion compared to $161.63 billion
Adjusted earnings per share: 0.65 USD compared to 0.61 USD
Total like-for-like sales growth in the US: 3.41% versus 6.30%
Sales growth in comparable Walmart stores in the US: 3.43% versus 6.40%
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Traffic: 2.82% versus 2.90%
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Ticket growth: 1.27% versus 3.40%
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E-commerce growth: 2.10% versus 2.30%
Sales growth in Sam’s Club stores in the US: 3.90% versus 5.50%
As of the first quarter, the company expected revenue growth of 3 to 4% (above) for fiscal year 2025. Operating profit should grow by 4 to 6% (above).
CFO Rainey said in the first-quarter conference call that they plan to “review our full-year guidance after the conclusion of the second quarter.”
“This is more in line with our previous update cadence and is consistent with our philosophy as a management team to see early momentum but also to exercise caution at the start of the year given the macroeconomic uncertainty and the fact that so much of the year is still ahead of us,” he said.
Lasser expects Walmart to raise its full-year guidance. Walmart shares are up 27.5% so far this year, compared to a 14% gain for the S&P 500 (^GSPC).
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Subscribe or email her at [email protected].
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