Walmart Earnings Preview: America’s Inflation Fighter and AI Beneficiary

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Walmart Inc,Kroger Company,Albertsons Companies

Stocks Analysis by Brian Gilmartin covering: Amazon.com Inc, Walmart Inc, Kroger Company, Albertsons Companies. Read Brian Gilmartin's latest article on Investing.com

) is expected to report their fiscal Q1 ’25 financial results before the opening bell on Thursday, May 16th, 2024. Analyst consensus is is expecting $0.52 in earnings per share, $6.5 billion in operating income and $159.5 billion in quarterly revenue for expected yoy growth of 6%, 4.5% and 4.4% respectively.

Here’s the data proof for readers: let’s look at comp’s and “average ticket” for Walmart since the pandemic started: Per the street consensus numbers, Walmart is expected to print $700 billion in revenue in fiscal 2026, which ends in January ’26, and anywhere between 52% and 70% of that $700 billion will be grocery revenue.

Walmart is a secular 3% – 5% revenue grower and a secular 7% EPS grower, given the expected $700 billion in revenue projected for 2026. The point being to that – and I haven’t read either the McKinsey or the Jefferies report in detail – if Walmart wants to use AI effectively it’s likely going to be from cost reduction or what’s called “the middle of the P/L” and productivity gains.

The key metric to watch going forward – in my opinion – is Walmart’s operating margin. That’s the financial metric that in my opinion will start to reflect Walmart’s supply-chain, and inventory management initiatives.

Walmart is now a 1.5% position in client accounts, up from 0% and the catalyst to own was the selloff in Walmart down to $120 as the stock was crushed on bloated inventory growth exceeding revenue growth in late ’21 and early ’22.

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