Walmart Inc analysis: why Walmart’s earnings are more important than you think

on May 15, 2024
  • You may know that retail giant Walmart Inc is reporting their Q1 earnings tomorrow.
  • What you may not know is what they mean for the economy.
  • We unpack the significance of Walmart's results from a macroeconomic view, and also what to expect tomorrow.

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Tomorrow, Walmart Inc, one the largest US multinational retailers in the world, reports its earnings for the first quarter of its FY 2025. And they’re more important than you might think – even if you’re not a Walmart investor.

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Why are Walmart earnings important?

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What many people don’t know is that Walmart is often considered by analysts to be a bellwether stock for the average American household’s financial circumstance in the last quarter.

Whether spending increased on big ticket items – or decreased instead – at stores as widespread as Walmart can be a valuable window into the health of the average American’s wallet.

Also, Walmart Inc has previously proven that their earnings can outperform in a time when the US economy is struggling, as more people seek out discount stores. This happened during the 2008 financial crisis, for example.

And, as we all know, the US economy and monetary policy tends to follow household circumstances – and other nations tend to follow them.

Home Depot earnings

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We may have been given a sneak peek into Walmart’s earnings by rival home store retailer Home Depot, which reported its earnings yesterday.

The company’s results were not encouraging. Home Depot announced sales of $36.4 billion for the first quarter of fiscal 2024, a decrease of 2.3% from the first quarter of fiscal 2023. Comparable sales for the first quarter of fiscal 2024 decreased 2.8%, and comparable sales in the U.S. decreased 3.2%.

Where is Walmart at ahead of earnings?

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Walmart has been trading fairly well in 2024 so far, its stock price is 12.7% this year to date, although it has given up some of its gains recently. Walmart Inc is also down roughly 1.5% in the past week, and 0.9% today, ahead of earnings at the time of this article going to press.

What the technical analysis says

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Invezz analyst Ritesh A. says that Walmart is in a reasonably good space in the last few months – albeit bound within a $58 to $61.50 range:

Since Walmart reported its Q4 results in February and the stock gapped up from $55 levels to $60, it has largely been trading in a range between $58.5 and $61.5. It has thrice tried to break above $61.5, but couldn’t. The short-term momentum indicators are currently in a neutral zone, which suggests neither bulls nor bears control the stock.”

Read Ritesh A’s signals and analysis: Walmart pre-earnings: don’t buy yet

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