Yichang, China – May 10, 2023 – People buy consumer goods at a Walmart store in Yichang, Hubei , [+]
Note: Walmart’s FY’2023 ends in January 2023.
Walmart (NYSE: WMT), the world’s largest retailer operating discount stores, supercenters, neighborhood markets and Sam’s Club warehouses, is scheduled to report results for its fiscal first quarter on Thursday, May 18. We expect WMT stock to see very little downside. No movement on expected revenue and earnings with consensus in fiscal first quarter results. Walmart expects fiscal 2024 to be a challenging and uncertain year ahead with inflation and recession fears weighing on consumers. In fiscal 2024, Walmart projects net sales growth of 2.5% to 3%, roughly in line with previous years. Its US comp sales (excluding fuel) are expected to grow by about 2% to 2.5%. That said, we believe the company’s performance in e-commerce, Sam’s Club and other new businesses still puts it in a good position for long-term growth.
Walmart Connect, the company’s digital advertising division, is the company’s biggest game-changing initiative to date. It’s driven by online-shopping traffic to Walmart.com. The retailer’s advertising revenue to grow 30% year-on-year (YoY) to $2.7 billion in FY2023. These gains came despite the current challenging economic environment, which has slowed sales growth for digital advertising giants such as Meta Platforms and Alphabet.
Our forecast indicates a valuation of Walmart at $153 per share, which is in line with the current market price. View our interactive dashboard analysis at WMT Earnings Preview: What to expect in Q1? for more information.
WMT Earnings Estimates for Q1 FY2024
(1) Revenue is expected to be in line with consensus estimates
Trefis estimates Walmart’s 2024 first quarter revenue to be approximately $148 billion, which is in line with consensus estimates. In fiscal 2023, Walmart posts revenue of $611 billion, up 6.7% YoY, driven by 6.6% growth in US same-store sales. In addition, its e-commerce revenue in the US grew 12%, with Sam’s Club brand sales also growing by double-digit percentages. This growth was aided by in-store-fulfilled pickup and delivery as well as advertising. The company said e-commerce will generate more than $80 billion in sales for the full year of fiscal 2023, or 13% of total revenue. we guess walmart’s revenue To be $633.7 billion for fiscal year 2024 (year ending January 2024).
(2) EPS is likely to match consensus estimates
WMT is expected to earn $1.32 per share in the first quarter of 2024, per Trefis analysis, which matched consensus estimates. While Walmart’s revenue grew at a healthy rate from an already large base, increased freight costs put pressure on its margins. Its gross margin is expected to drop from 25.1% in FY2022 to 24.1% in FY2023. It was the same story with operating margin, which dropped from 4.5% to 3.3%.
(3) The estimate of the stock price matches the current market price
According to Walmart’s valuation, this translates into a price of $153, with an EPS estimate of approximately $6.14 in fiscal 2024 and a P/E multiple of 25.0x, which is in line with the current market price.
It’s helpful to see how its peers stack up. WMT Peers shows how Walmart’s stock compares against peers on the metrics that matter. You’ll find other valuable comparisons for companies in all industries at Peer Comparisons.
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