Will Walmart’s gross margin expand next quarter?

**Walmart's gross margin is poised for expansion in the coming quarter.** Here's the analysis to support this conclusion:

1. **Strategic Shift Towards High-Margin Ventures**: Walmart is actively shifting its growth strategy towards high-margin revenue streams such as advertising, memberships, and marketplace expansion. These segments have been experiencing significant growth, with advertising revenues surging 50% year-over-year.
2. **Improved Operational Efficiency**: The company is investing in digital technologies and automation to enhance operational efficiency. This is evident in the increased digital penetration, the expansion of its next-generation centers, and the integration of AI-driven innovations. These efforts are expected to reduce handling costs and increase throughput, which can lead to improved gross margins.
3. **Market Expansion and Partnerships**: Walmart's international performance, led by strong ad revenues from Flipkart, indicates a successful expansion into new markets. Additionally, partnerships like the one with Dollar Shave Club and the national rollout of Tevra Brands' Vetality products demonstrate the company's ability to diversify and capture new customer segments.
4. **Historical Trends**: Walmart has a history of improving its gross margin over time, with a recent peak of 25.65% in 2018. Although the current margin is 24.63%, there is a trajectory for improvement, especially as the company continues to optimize its operations and expand into higher-margin businesses.
5. **Financial Projections**: Analysts expect Walmart's revenue for the upcoming quarter to be between $174.041 billion and $175.62 billion, with a forecasted EPS increase of approximately 7.46% year-over-year. This suggests that the company is on track for growth, which often precedes improvements in gross margin.

In conclusion, Walmart's strategic initiatives, operational enhancements, and historical trends indicate that the company's gross margin is likely to expand in the next quarter.