Walmart is set to report its latest quarterly earnings on November 19, and Bank of America Securities believes the retail giant could again nudge its full-year sales and profit forecasts toward the top end of the ranges it set back in August. The bank's view reflects Walmart's continued ability to win market share in groceries and general merchandise, even as shoppers remain focused on value.
That optimism comes against a backdrop of mixed inflation news. Recent U.S. data showed prices cooled in October but still ran hotter than Wall Street had expected. For everyday consumers, that means the pressure on household budgets hasn't fully lifted, which tends to keep them gravitating toward discount retailers like Walmart. For investors, it also means the company's performance is being watched as a barometer of consumer health.
What BofA expects
For the quarter, Bank of America Securities projects earnings per share of $0.63 and U.S. comparable sales growth of 2.8% excluding fuel. Those numbers are in line with what analysts generally anticipate, but the bank notes that investors are looking for signs that sales growth is broadening beyond the health and wellness categories that have been a standout for Walmart.
The bank also flagged a potential headwind: supplier costs could start rising again, pointing to higher oil prices and the risk of more grocery price increases. That's a reminder that even a low-margin retailer like Walmart isn't immune to input cost pressures, especially in food and other essentials.
The bigger question: ads and marketplace
While the headline guidance range—adjusted earnings per share of $2.80 to $2.87 and sales growth of 4% to 5%—is important, BofA argues it may matter less than the trajectory of Walmart's higher-margin businesses. The company's third-party marketplace and advertising operations carry significantly better margins than selling physical goods. If those segments grow fast enough, they can lift operating profit even if store sales don't suddenly reaccelerate or if commodity costs rise.
That's why the stock's reaction to the earnings report often hinges on evidence that these businesses are becoming a bigger share of overall earnings, rather than just a small tweak to the annual EPS range. Investors want to see that the profit mix is shifting toward these more lucrative revenue streams.
What it means for investors
For everyday investors, Walmart's report is more than just one company's numbers. It's a window into the health of the American consumer and the broader retail sector. If Walmart raises its guidance, it could signal that shoppers are still spending, even if cautiously. But if the company sounds cautious about supplier costs or consumer demand, that could ripple through the market.
The read-through could also affect other big-box retailers reporting later this month, including Target, Home Depot, Lowe's, and Best Buy. Their results will likely be compared against Walmart's performance, and any signs of strength or weakness could influence investor sentiment across the sector.
For those watching the broader market, Walmart's earnings come at a time when inflation data has been mixed and interest rate expectations remain in flux. A strong report could reassure investors that consumer spending is holding up, while a weak one might reignite concerns about the economy's resilience.
Ultimately, the key number to watch may not be the EPS guidance itself, but what management says about the growth of its advertising and marketplace businesses. Those are the engines that could drive profit growth in the coming year, and they're the ones that could set Walmart apart from its peers.
As always, it's worth remembering that past performance isn't a guarantee of future results, and individual stocks can be volatile around earnings. But for investors looking for clues about the retail landscape and consumer behavior, Walmart's report is a must-watch event.
