* Reports Thursday, November 15, before the market is open
* Income Expectation: $ 124.83B
* EPS: $ 1.02
With US strong and at or nearly all-time lows, most Americans have more money to spend. That would be for Walmart Inc. (NYSE :), the largest retailer in the world, should make it easy to report healthy growth during the Q3 2018 income demand that will impress investors.
Indeed, investors expect nothing less than a blow-out quarter when the bigbox retailer reports on Thursday, November 15 before the market opens. In the, Walmart reported its strongest sales profits in more than a decade, driven by its grocery stores
Comparable sales at US Walmart stores increased by 4.5% in the three months ended in July, more than double estimates from analysts. During his latest report, the world's largest retailer also increased the annual forecasts for comparable sales and adjusted earnings.
Walmart is expected to report a profit of $ 1.02 per share, according to FactSet, a penny from last year, on sales of $ 125.4 billion. The retailer has reported earnings forecasts for 11 of the past 12 quarters.
Online sales are key
But without a doubt, the number that is crucial to the ongoing momentum of the share price, which closed just under $ 103 last night, is a growth in Walmart's online sales. This measure is crucial to prove the success of the company's ongoing struggle with the e-commerce giant Amazon.com (NASDAQ :).
In our opinion, there is clear evidence that Walmart's huge investments to improve its digital platform are bearing fruit. In the second quarter, online sales in the US continued their upward trend, 40% higher than in the same period a year ago, putting Walmart's full year-on-year support for the growth of its online sales within arm's reach
The success of its hybrid retail model – in which its huge store network and online presence come together to create a superior shopping experience for customers – shows that the retailer can survive in the rapidly changing shopping environment where customers make cuts to stores and rely on e-commerce.
WMT Weekblad 2015-2018
The continued success of Walmart's online strategy, as well as the strong retail offer, does not justify the underperformance of its shares compared to other retailers this year, such as Target (NYSE: NYSE 🙂 and Costco (NASDAQ :)). Both shares are up by about 25%, compared to Walmart's earnings of only 5% in the same period.
In our opinion, investors depend too much on the cost pressures of the company because of its aggressive investments to improve the online infrastructure. In fact, it makes sense for long-term investors to ignore these concerns as long as Walmart shows revenue growth and wins additional online customers.
Bottom Line
Regardless of quarterly financial results, Walmart is a great defensive stock to hold during market declines and economic uncertainty. The shares have risen by 15% in the past three months, even when they fell by around 6%. This is clear proof that the retailer offers a good hedge for buy-and-hold investors
Walmart's 4,700-plus locations in the US, more than $ 500 billion in annual sales, and the potential for global growth, offer scale and an economic moat that most of its competitors can not match.
