Walmart Q2 earnings on deck: What to expect

When Walmart (NYSE:WMT [https://seekingalpha.com/symbol/WMT]) posts earnings on Thursday, investors will try to gauge the impact of inflation and tariff pressure on the retail giant’s quarter and guidance.

Wall Street expects the Arkansas-based firm to post [https://seekingalpha.com/symbol/WMT/earnings/estimates?period=quarterly]EPS of $0.74, implying a rise of 10%, while revenue is expected to rise 3% to $174.32 billion during the quarter.

Walmart has maintained its dominance even during uncertain economic conditions, thanks to its ability to manage costs and keep attracting a steady flow of customers. However, the world's largest retailer in May said it will have to hike prices for goods, signaling that it is heavily exposed to tariff-related pressure.

The company faces margin pressure, with inflation and tariffs posing risks to profitability and consumer resiliency.

Walmart’s results come after Target this week said [https://seekingalpha.com/news/4487430-target-shares-remain-underwater-as-ceo-pick-and-exec-assurances-fail-to-soothe-investors] it continues to “plan cautiously for the back half of the year” due to a highly volatile environment.

Still, Wall Street analysts are bullish [https://seekingalpha.com/symbol/WMT/ratings/quant-ratings] on the company and consider it a Strong Buy. In contrast, Seeking Alpha analysts and Seeking Alpha’s Quant ratings rated the stock a Hold.

“Despite economic resilience, consumer sentiment is weakening, and inflationary pressures may compress Walmart’s margins even as sales could exceed expectations,” said Seeking Alpha analyst Luca Socci.

Another Seeking Alpha analyst, Kevin George, noted [https://seekingalpha.com/article/4814529-walmart-recent-inflation-data-is-a-headwind-ahead-of-q2-earnings] that Walmart has some positive trends, such as advertising, but this could be a tough period for the sector. The recent inflation data is a headwind for Walmart, added George.

Over the last two years, Walmart has beaten EPS and revenue estimates [https://seekingalpha.com/symbol/WMT/earnings/eps-surprise-summary] 100% of the time. Over the last three months, EPS estimates have seen 11 upward revisions [https://seekingalpha.com/symbol/WMT/earnings/revisions], compared to one downward revision. Revenue estimates have been revised upwards six times versus one downward move.

The stock rose nearly 13% so far this year, outperforming the nearly 9% rise in the broader S&P500 Index.

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