Walmart earnings could jolt the retail sector
Justin Sullivan

Walmart (NYSE:WMT) will release its holiday quarter earnings report on Tuesday.
The retail giant is expected to report revenue of $158.6B and EPS of $1.51. Comparable sales are forecast to rise 4.9% during the quarter after stripping out fuel sales. The grocery business is expected to be strong again, with Walmart's "Everyday Low Price" strategy leading to a consumer trade-down benefit. Of note, 10 of the last 14 earnings revisions from analysts have been to the upward side. Options trading implies a 5% move after the report drops. Shares of WMT jumped 6.5% after the Bentonville company's last earnings report.
On the conference call, the update from Walmart (WMT) execs on inventory issues, freight costs, vendor relationships, and supply chain challenges will be key. Overall, analysts expected a cautious tone from the retailer due to the competitive environment and choppy macroeconomic backdrop.
Ahead of the Walmart print, Evercore ISI added Walmart (WMT) to its list of best tactical trading ideas on its view the earnings results will beat expectations and that a drop in full-year guidance is likely already reflected in the stock's performance. The firm sees sticky inflation in grocery driving up demand for WMT's value offering. "We believe management is likely to guide CY23 below consensus $6.54 outlook, potentially in the $6.10-$6.30 range, with a comp of around 3%," previewed analyst Greg Melich.
On Seeking Alpha, The Value Pendulum issued a Buy recommendation on Walmart (WMT). WMT is expected to have benefited from lower expenses associated with product cost and shipping in the recent quarter, as well as gain market share at the expense of competitors charging relatively higher prices. Walmart's (WMT) earnings report will be of high interest across the retail sector (XRT) with earnings reports due to our in over the next two week. Some of the notable names to watch after the Walmart print include Amazon (AMZN), Target (TGT), Dollar General (DG), Dollar Tree (DLTR), Costco (COST), Best Buy (BBY), Kroger (KR), and Macy's (M).