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As Walmart Inc. (WMT - Free Report) is set to release first-quarter fiscal 2025 earnings on May 16, it is worth taking a closer look at the company’s e-commerce business, which has been an important contributor to revenues for a while now.
Walmart’s e-commerce business and omnichannel penetration have been increasing. E-commerce sales formed 18% of the company’s overall net sales in the fourth quarter of fiscal 2024 compared with 15% in the third quarter. The increasing penetration reflects customers’ rising inclination toward online shopping, as well as Walmart’s proactive measures to adapt to evolving market dynamics.
The e-commerce segment is poised to play a pivotal role in shaping Walmart's performance during the impending quarter.
E-Commerce Paves the Way
Walmart continues to be driven by its strong omnichannel business, with store-fulfilled delivery sales up 50% in the fourth quarter of fiscal 2024. Impressive store proximity to customers has allowed Walmart to use its stores to fulfill e-commerce orders. The company has been taking several initiatives to enhance e-commerce operations, including buyouts, alliances, and improved delivery and payment systems.
Walmart has been innovating in the supply chain and adding capacity as well as building businesses such as Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+ and Walmart Fulfillment Services. In its fourth-quarter earnings release, the company announced its deal to buy VIZIO HOLDING to strengthen Walmart Connect in the United States. Other notable strides in the e-commerce realm include the buyout of a major stake in Flipkart, which has been bolstering its International segment. Walmart’s majority stake in India’s digital transaction platform, PhonePe, is also worth mentioning.
Walmart's relentless focus on the burgeoning online grocery market is evident from a range of initiatives. These include the introduction of services like Express On-Demand Early Morning Delivery, strategic collaborations such as the one with Salesforce, the enhancement of pickup and delivery options, the rollout of the Walmart+ membership program and the expansion of curbside services. These efforts collectively contribute to a substantial boost in Walmart's delivery capabilities, enhancing customer convenience and driving deeper market penetration.
As of the fourth quarter of fiscal 2024, Walmart U.S. had nearly 4,600 pickup locations and more than 4,300 same-day delivery stores. E-commerce sales surged 23% globally on pickup and delivery in the fourth quarter of fiscal 2024. U.S. e-commerce sales rose 17%, driven by strength in pickup & delivery. International segment e-commerce sales soared 44% due to solid marketplace and omnichannel offerings. At Sam’s Club, e-commerce sales jumped 17% on strong curbside and delivery.
The benefits of these upsides are likely to have driven Walmart’s e-commerce sales, thereby boosting revenues in the quarter under review.
Other Factors & Q1 Expectations
Other than e-commerce strength, Walmart stands to gain from its impressive store operations. The company’s focus on enhancing its physical store fleet has been instrumental, serving customers directly while also supporting a significant portion of e-commerce sales. Store remodeling initiatives have helped upgrade stores with advanced in-store and digital innovations. Gains from higher-margin ventures, such as advertising, are also noteworthy. However, any persistence of elevated operating expenses and adverse category mix due to softness in general merchandise may have tempered some aspects of performance.
For the first quarter of fiscal 2025, the company anticipates consolidated net sales growth of 4-5% at constant currency or cc, including a nearly 100 bps gain from the leap year. Consolidated operating income growth is expected to be 3-4.5% at cc. Management envisions pre-split adjusted EPS in the band of $1.48-$1.56 in the first quarter, while the post-split EPS is expected to come between 49 and 52 cents.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for first-quarter revenues stands at $159.3 billion, which suggests 4.6% growth from the figure reported in the year-ago period. The consensus estimate for earnings per share has remained unchanged at 52 cents over the past 30 days, which indicates a jump of 6.1% from the year-ago period earnings of 49 cents. WMT has a trailing four-quarter earnings surprise of 7.3%, on average.
Walmart carries a Zacks Rank #3 (Hold) and has an Earnings ESP of +2.45%. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time:
The TJX Companies (TJX - Free Report) currently has an Earnings ESP of +2.50% and a Zacks Rank #2. TJX is likely to register top and bottom-line growth when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.5 billion, which indicates a 5.8% rise from that reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TJX’s fiscal first-quarter earnings is pegged at 87 cents, which implies 14.5% growth from the year-ago quarter's actuals. The consensus mark has been unchanged in the past 30 days. TJX has a trailing four-quarter earnings surprise of 6.3%, on average.
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) currently has an Earnings ESP of +3.08% and a Zacks Rank of 3. The company is likely to register top-and-bottom-line increases when it posts first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Ollie's Bargain’s quarterly revenues is pegged at $503.8 million, which calls for growth of 9.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ollie's Bargain’s quarterly earnings of 65 cents suggests a rise of 32.7% from the year-ago quarter’s levels. OLLI has a trailing four-quarter earnings surprise of 7.3%, on average.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +2.48% and a Zacks Rank of 3. The company is likely to register a top-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Dollar Tree’s quarterly revenues is pegged at $7.6 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
However, the Zacks Consensus Estimate for Dollar Tree’s quarterly earnings of $1.44 suggests a drop of around 2% from the year-ago quarter’s levels. DLTR has a trailing four-quarter negative earnings surprise of 1.9%, on average.
Image: Bigstock
Walmart (WMT) Q1 Earnings Coming Up: E-Commerce Steers Growth
As Walmart Inc. (WMT - Free Report) is set to release first-quarter fiscal 2025 earnings on May 16, it is worth taking a closer look at the company’s e-commerce business, which has been an important contributor to revenues for a while now.
Walmart’s e-commerce business and omnichannel penetration have been increasing. E-commerce sales formed 18% of the company’s overall net sales in the fourth quarter of fiscal 2024 compared with 15% in the third quarter. The increasing penetration reflects customers’ rising inclination toward online shopping, as well as Walmart’s proactive measures to adapt to evolving market dynamics.
The e-commerce segment is poised to play a pivotal role in shaping Walmart's performance during the impending quarter.
E-Commerce Paves the Way
Walmart continues to be driven by its strong omnichannel business, with store-fulfilled delivery sales up 50% in the fourth quarter of fiscal 2024. Impressive store proximity to customers has allowed Walmart to use its stores to fulfill e-commerce orders. The company has been taking several initiatives to enhance e-commerce operations, including buyouts, alliances, and improved delivery and payment systems.
Walmart has been innovating in the supply chain and adding capacity as well as building businesses such as Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+ and Walmart Fulfillment Services. In its fourth-quarter earnings release, the company announced its deal to buy VIZIO HOLDING to strengthen Walmart Connect in the United States. Other notable strides in the e-commerce realm include the buyout of a major stake in Flipkart, which has been bolstering its International segment. Walmart’s majority stake in India’s digital transaction platform, PhonePe, is also worth mentioning.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
Walmart's relentless focus on the burgeoning online grocery market is evident from a range of initiatives. These include the introduction of services like Express On-Demand Early Morning Delivery, strategic collaborations such as the one with Salesforce, the enhancement of pickup and delivery options, the rollout of the Walmart+ membership program and the expansion of curbside services. These efforts collectively contribute to a substantial boost in Walmart's delivery capabilities, enhancing customer convenience and driving deeper market penetration.
As of the fourth quarter of fiscal 2024, Walmart U.S. had nearly 4,600 pickup locations and more than 4,300 same-day delivery stores. E-commerce sales surged 23% globally on pickup and delivery in the fourth quarter of fiscal 2024. U.S. e-commerce sales rose 17%, driven by strength in pickup & delivery. International segment e-commerce sales soared 44% due to solid marketplace and omnichannel offerings. At Sam’s Club, e-commerce sales jumped 17% on strong curbside and delivery.
The benefits of these upsides are likely to have driven Walmart’s e-commerce sales, thereby boosting revenues in the quarter under review.
Other Factors & Q1 Expectations
Other than e-commerce strength, Walmart stands to gain from its impressive store operations. The company’s focus on enhancing its physical store fleet has been instrumental, serving customers directly while also supporting a significant portion of e-commerce sales. Store remodeling initiatives have helped upgrade stores with advanced in-store and digital innovations. Gains from higher-margin ventures, such as advertising, are also noteworthy. However, any persistence of elevated operating expenses and adverse category mix due to softness in general merchandise may have tempered some aspects of performance.
For the first quarter of fiscal 2025, the company anticipates consolidated net sales growth of 4-5% at constant currency or cc, including a nearly 100 bps gain from the leap year. Consolidated operating income growth is expected to be 3-4.5% at cc. Management envisions pre-split adjusted EPS in the band of $1.48-$1.56 in the first quarter, while the post-split EPS is expected to come between 49 and 52 cents.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for first-quarter revenues stands at $159.3 billion, which suggests 4.6% growth from the figure reported in the year-ago period. The consensus estimate for earnings per share has remained unchanged at 52 cents over the past 30 days, which indicates a jump of 6.1% from the year-ago period earnings of 49 cents. WMT has a trailing four-quarter earnings surprise of 7.3%, on average.
Walmart carries a Zacks Rank #3 (Hold) and has an Earnings ESP of +2.45%. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time:
The TJX Companies (TJX - Free Report) currently has an Earnings ESP of +2.50% and a Zacks Rank #2. TJX is likely to register top and bottom-line growth when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $12.5 billion, which indicates a 5.8% rise from that reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TJX’s fiscal first-quarter earnings is pegged at 87 cents, which implies 14.5% growth from the year-ago quarter's actuals. The consensus mark has been unchanged in the past 30 days. TJX has a trailing four-quarter earnings surprise of 6.3%, on average.
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) currently has an Earnings ESP of +3.08% and a Zacks Rank of 3. The company is likely to register top-and-bottom-line increases when it posts first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Ollie's Bargain’s quarterly revenues is pegged at $503.8 million, which calls for growth of 9.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ollie's Bargain’s quarterly earnings of 65 cents suggests a rise of 32.7% from the year-ago quarter’s levels. OLLI has a trailing four-quarter earnings surprise of 7.3%, on average.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +2.48% and a Zacks Rank of 3. The company is likely to register a top-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Dollar Tree’s quarterly revenues is pegged at $7.6 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
However, the Zacks Consensus Estimate for Dollar Tree’s quarterly earnings of $1.44 suggests a drop of around 2% from the year-ago quarter’s levels. DLTR has a trailing four-quarter negative earnings surprise of 1.9%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.