To The Moon

$Wal-Mart(WMT)$ is scheduled to report its earnings for the fiscal third quarter of 2025 before the market open on Tuesday (19 Nov).

Market is expecting sales to continue growing as Walmart's customer base grows, Wal-Mart said that their market share grew across income levels in recent quarters, this trend of market share growth should continue.

On top of that, improving sales is also expected as WMT continues to expand its customer base across income levels. Another area of growth would be WMT digital advertising business, this business should be able to boost Walmart's overall profit margins.

Earnings per share is expected to come in at 53 cents.

Looking Forward For WMT To Adjust Outlook

I think market and analysts are looking for WMT to adjust their outlook for the year as walmart is projected to report quarterly revenue at $167.73 billion, up from $160.8 billion at the same time last year. WMT is expected to post net income of $4.24 billion, up from $453 million last year, when its profits were hit by negative changes to the value of some of its investments.

Walmart's adjusted profits are expected to rise to $4.26 billion from $4.13 billion in the second quarter.

New retail data shows spending picked up in October ahead of the holiday season. analysts say fewer consumers have been holding back. October retail sales were up 0.4% from September, when core spending shot up at the fastest monthly rate since January 2023.

WMT Detailed Shifting Shopping Habits To Watch

The retailer estimates it serves 255 million customers a week, and its leaders detailed their shifting shopping habits on last quarter's call: CFO John David Rainey said then that high-income consumers were flocking to the company for its Walmart+ membership program and delivery service, while executives also noted a growing appetite for private labels, particularly for food

WMT says that every week they are seeing 30 million visitors to their stores. In the last earnings update, WMT CEO says that shoppers were more comfortable spending on discretionary items again and noted that apparel sales grew for the first time in more than a year.

If we looked at the customer profiling for WMT, we are seeing that household income between $100,000 to $149,999 are also growing and it is now at more than 20%.

Inflation Fears Coming Back Might Hurt Spending

Americans spent more last month, with eight of 13 retail categories posting gains in the Commerce Department data. With price increases slowing, people are able to direct more dollars toward electronics, restaurants and other "fun" categories, Wells Fargo noted: Grocery bills, for example, grew 0.1% from September to October.

Lower energy prices have freed up some of Americans' dollars, paving the way for "healthy" retail sales throughout the holidays, the National Retail Federation said.

Shoppers are still contending with inflation, though. The consumer price index was up 2.6% for the year ended in October, and rose 0.2% from September to October, this matches the monthly pace of inflation since July the Bureau of Labor Statistics said.

Wal-Mart (WMT) Significant YTD Returns To Investors

If we looked at WMT as a consumer staples sector stock for defensive strategy, it has done well for the investors, as it has given more than 60% year-to-date.

This should continue to grow upward as consumer would have more to spend as inflation starts to come down and also the rate cut makes their borrowing cheape, giving consumer more disposable income to spend.

Hedge Fund Is Reducing Their Holdings

During the last quarter we are seeing hedge funds decreasing their holdings by 3.5M shares, this could be signalling that concerns of shoppers still contending with inflation, though, especially when consumer price index was up 2.6% for the year ended in October, and rose 0.2% from September to October.

This actually shows that consumers would be in average shape for their spending for the gift-giving season.

Wal-Mart (WMT) Remains Neutral About Its Stock Price

We are seeing some investors portfolios reducing WMT over the last 7 days with a drop of 0.3%, but over the last 30 days it is gaining 0.40%.

This makes investors to remain neutral on WMT stock price.

Technical Analysis - MACD and Multi-timeframe (MTF)

WMT have been trading pretty well and long above the short-term and long-term MA and we are also seeing strong uptrend signal from MTF. Though MACD does not give much confirmation of a continued upside movement, what I would think is investors looking out for WMT outlook for its future growth, this would be important as shoppers are grappling with inflation, as the recent economic data might suggest that prices might go up again.

So I would be looking out for WMT stock price movement on Monday (18 Nov) whether the market is confident that WMT is in a good position to gain in holiday sales though at a slower pace. There should be a broader spending continuing at a robust clip.

Summary

WMT have been giving a detailed update of their consumer spending behavior, and with some other major retailers like $Target(TGT)$ also releasing their quarterly earnings report, we should be able to get valuable insights into consumer spending trends and business performance across key sectors.

One thing that we need to look out for WMT earnings would be their outlook guidance for the rest of the year especially for the upcoming holiday season.

Appreciate if you could share your thoughts in the comment section whether you think WMT would give an outlook guidance upgrade with a positive earnings result.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.