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Everything You Should Note Before Walmart's (WMT) Q3 Earnings
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Walmart Inc. (WMT - Free Report) is likely to register an increase in the top and bottom lines when it reports third-quarter fiscal 2021 numbers on Nov 17, before market open. The Zacks Consensus Estimate for earnings has gone up a penny in the past 30 days to $1.19 per share, suggesting a 2.6% rise from the figure reported in the prior-year period. Markedly, Walmart delivered an earnings surprise of 27.9% in the last reported quarter. Further, the omnichannel retailer has a trailing four-quarter earnings surprise of 9.5%, on average.
The Zacks Consensus Estimate for revenues is pegged at $132.4 billion, indicating an increase of 3.4% from the prior-year quarter’s reported figure. However, it looks like the rate of sales growth is likely to decelerate on a sequential basis. The company had witnessed an increase of 5.6% in the last reported quarter.
Elevated demand for essentials amid the coronavirus-induced increased at-home consumption and pantry loading has been working well for Walmart. Further, increased stay-at-home trends have been boosting the company’s e-commerce sales. In fact, Walmart has been taking bold strides to strengthen its delivery services, given its increased significance amid the coronavirus-led social distancing. To this end, the company’s recently unveiled Walmart+ program (in September) is likely to have aided. The program comprises unlimited free delivery, Scan & Go options and discount offers. Apart from this, Walmart has been gaining from its Express Delivery service, through which many items from its stores can be delivered to customers in less than two hours. The service has been expanded to more than 2,800 stores, which are accessible to more than 65% of U.S. households.
Certainly, these upsides have been aiding Walmart’s e-commerce business, which along with its concerted efforts to bolster store sales helped its U.S. comp sales to increase for the 24th straight time in the last reported quarter. Notably, the company has been undertaking several efforts to enhance merchandise assortments. Also, it has been focused on store remodeling, to upgrade them with advanced in-store and digital innovation. Apart from this, Walmart’s early deals for the holiday season are likely to have aided. Well, retailers unveiled holiday deals earlier this year, with an aim to have a spread out and safe holiday season shopping experience. In this regard, Walmart hosted its five-day Big Save Event from Oct 11 to Oct 15. The company offered deals on tech gadgets, home and appliance, beauty and fashion, and toys, among others.
That being said, we cannot ignore the impact of increased promotions and pricing on margins. Also, the company has been seeing high costs related to COVID-19, like higher wages and benefits along with costs associated with sanitization and other safety measures. Apart from this, management remained cautious about its back-to-school season’s performance, during its last earnings call. The company said that in the Walmart U.S. segment, the back-to-school season started slower than usual due to the uncertainty related to students’ physical return to schools. Though sales of products like laptops and tablets were trending well, those of basic school supplies, backpacks and apparel remained sluggish. Management, then, said that it expected the back-to-school season to be tough this time.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Walmart this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Best Buy (BBY - Free Report) has an Earnings ESP of +14.92% and a Zacks Rank #2.
Lowe’s (LOW - Free Report) has an Earnings ESP of +8.85% and a Zacks Rank #2.
Dollar General (DG - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
Image: Bigstock
Everything You Should Note Before Walmart's (WMT) Q3 Earnings
Walmart Inc. (WMT - Free Report) is likely to register an increase in the top and bottom lines when it reports third-quarter fiscal 2021 numbers on Nov 17, before market open. The Zacks Consensus Estimate for earnings has gone up a penny in the past 30 days to $1.19 per share, suggesting a 2.6% rise from the figure reported in the prior-year period. Markedly, Walmart delivered an earnings surprise of 27.9% in the last reported quarter. Further, the omnichannel retailer has a trailing four-quarter earnings surprise of 9.5%, on average.
The Zacks Consensus Estimate for revenues is pegged at $132.4 billion, indicating an increase of 3.4% from the prior-year quarter’s reported figure. However, it looks like the rate of sales growth is likely to decelerate on a sequential basis. The company had witnessed an increase of 5.6% in the last reported quarter.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
Key Factors to Note
Elevated demand for essentials amid the coronavirus-induced increased at-home consumption and pantry loading has been working well for Walmart. Further, increased stay-at-home trends have been boosting the company’s e-commerce sales. In fact, Walmart has been taking bold strides to strengthen its delivery services, given its increased significance amid the coronavirus-led social distancing. To this end, the company’s recently unveiled Walmart+ program (in September) is likely to have aided. The program comprises unlimited free delivery, Scan & Go options and discount offers. Apart from this, Walmart has been gaining from its Express Delivery service, through which many items from its stores can be delivered to customers in less than two hours. The service has been expanded to more than 2,800 stores, which are accessible to more than 65% of U.S. households.
Certainly, these upsides have been aiding Walmart’s e-commerce business, which along with its concerted efforts to bolster store sales helped its U.S. comp sales to increase for the 24th straight time in the last reported quarter. Notably, the company has been undertaking several efforts to enhance merchandise assortments. Also, it has been focused on store remodeling, to upgrade them with advanced in-store and digital innovation. Apart from this, Walmart’s early deals for the holiday season are likely to have aided. Well, retailers unveiled holiday deals earlier this year, with an aim to have a spread out and safe holiday season shopping experience. In this regard, Walmart hosted its five-day Big Save Event from Oct 11 to Oct 15. The company offered deals on tech gadgets, home and appliance, beauty and fashion, and toys, among others.
That being said, we cannot ignore the impact of increased promotions and pricing on margins. Also, the company has been seeing high costs related to COVID-19, like higher wages and benefits along with costs associated with sanitization and other safety measures. Apart from this, management remained cautious about its back-to-school season’s performance, during its last earnings call. The company said that in the Walmart U.S. segment, the back-to-school season started slower than usual due to the uncertainty related to students’ physical return to schools. Though sales of products like laptops and tablets were trending well, those of basic school supplies, backpacks and apparel remained sluggish. Management, then, said that it expected the back-to-school season to be tough this time.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Walmart this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Walmart currently has a Zacks Rank #3 and an Earnings ESP of +6.93%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Best Buy (BBY - Free Report) has an Earnings ESP of +14.92% and a Zacks Rank #2.
Lowe’s (LOW - Free Report) has an Earnings ESP of +8.85% and a Zacks Rank #2.
Dollar General (DG - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>