Walmart Q4 Earnings Preview: Revenue Beat Streak On The Line, Expert Advises Long-Term Holders To 'Enjoy The Ride'

As Walmart Inc. (WMT) prepares to release its fourth-quarter earnings on Thursday, February 20, investors are eagerly awaiting the results of the retail giant's fiscal year-end. With a recent streak of revenue beats and a strong performance in the e-commerce and omnichannel spaces, Walmart has been a standout performer in the retail sector. However, the market has high expectations, and any miss could lead to a significant pullback in the stock price. In this article, we'll preview Walmart's Q4 earnings, discuss the key factors driving its recent success, and provide guidance for long-term holders.



Key Factors Driving Walmart's Recent Success

1. Market Share Growth: Walmart has expanded its market share by offering competitive pricing and a wide range of products, attracting cost-conscious consumers during high-inflation periods. In the most recent quarter, Walmart's comparable-store sales grew by 5%, while Target's comps were flat, and Kroger's gains were just 2%. This indicates that Walmart's value-focused strategy has been a significant draw for consumers (Source: Benzinga, "Walmart Stock Hits New All-Time Highs, Company Goes Shopping For... Malls?").
2. E-commerce Gains: Walmart's e-commerce channel has been a significant driver of growth. In 2024, e-commerce sales surpassed $100 billion for the year, and in the most recent quarter, they grew by 27%. This growth has also led to increased traffic at physical stores, as customers often choose to shop in person when picking up online orders. In the U.S., customer traffic grew by 3% in the most recent quarter (Source: Walmart's Q4 FY24 Earnings Report).
3. Rising Profitability: Walmart's operating profit margin has been climbing back toward the 5% high that investors saw in 2022. This is due in part to the rising digital sales and higher membership fees. The company's strong execution and financial results reflect its ability to reshape its business model and invest in its people and global platform to drive profitable growth in the years ahead (Source: Walmart's Q4 FY24 Earnings Report).



What to Expect in Q4 Earnings

Analysts expect Walmart to report fourth-quarter revenue of $180.25 billion, up from $173.39 billion in last year's fourth quarter, and earnings per share of $0.64, up from $0.60 per share in last year's fourth quarter. The company has beaten analyst estimates for revenue in more than 10 straight quarters and earnings per share in four straight quarters and nine of the last 10 quarters overall. However, the lone quarter without a beat saw the company meet estimates.

Investors will be closely monitoring Walmart's guidance for the next fiscal year, as well as its e-commerce sales and comparable-store sales growth. Any miss in these areas could lead to a significant pullback in the stock price, as the market has high expectations for the retail giant.

Advice for Long-Term Holders

For long-term holders of Walmart stock, the advice is simple: enjoy the ride. Walmart's strong performance and growth prospects make it an attractive investment for the long term. However, it is essential to monitor the company's performance and adapt to any changes in the market or consumer behavior.

In conclusion, Walmart's Q4 earnings report will be a critical test of the company's recent revenue beat streak. With strong performance in the e-commerce and omnichannel spaces, as well as market share growth, Walmart has the potential to continue its streak of beats. However, any miss could lead to a significant pullback in the stock price. Long-term holders should remain focused on the company's long-term growth prospects and enjoy the ride.