Walmart Q1 Earnings on Deck as Trade War Tensions Ease
Walmart Q1 Earnings on Deck as Trade War Tensions Ease
Investors use Walmart as a gauge for consumer health because it’s one of the largest retailers in the United States
- Walmart is set to report first quarter earnings on Thursday.
- Investors are watching the Walmart earnings report to help assess how the US-China trade war is affecting consumers.
- The options market expects Walmart to move +/- 4.7 points, or 5% of the stock price, on earnings.
Walmart (WMT) is scheduled to announce first quarter fiscal earnings on Thursday, before the market open.
Investors use Walmart as a gauge for consumer health because it is one of the largest retailers in the United States. This report is particularly notable amid the ongoing trade war between the United States and China because Walmart sources heavily from Chinese manufacturers.
The U.S. tariff rate of 145% on China and the retaliatory tariff rate of over 100% by China on US imports have seriously hampered trade between the two countries. A 90-day pause was recently reached between Washington and Beijing, which the market cheered today.
Now, sources say President Trump is eager to work out a deal. In the meantime, US tariffs on Chinese imports are reduced to 30%, and China’s tariffs on US imports will be 10%. Doug McMillon, Walmart CEO, stated earlier this year the company continues to forecast 3% to 4% growth in sales for the quarter despite the tariffs. McMillon did state they were seeing more volatility in sales on a week-to-week basis.
What do investors expect?
Analysts expect Walmart to report earnings per share (EPS) of $0.57 for the first quarter, according to TradingView. That would be down from an EPS of $0.60 a year ago. Last quarter, Walmart reported an EPS of $0.66, although that figure was boosted by holiday spending.
Revenue is expected to cross the wires at $165.65 billion. That would compare to revenue of $161.5 billion a year ago and $180.5 billion last quarter. Walmart has beaten estimates on revenue and EPS over the last four quarters.
Analysts are mostly bullish on the stock, with 37 strong buy and buy ratings, four hold ratings and only one strong sell rating. The average one-year price target was at 108.51, representing a 13% increase from the current stock price.
Trading Walmart earnings
The May 16 options expiration for Walmart showed an expected move of +/- 4.7 points, or 5% of the current stock price. Walmart had an implied volatility rank (IVR) of 48.9, meaning volatility is about average compared to the last year of trading.
Walmart stock dropped to its 21-day exponential moving average (EMA) today. Prices haven’t traded below that level since early April. If Walmart can hold its recent gains from April when the stock rallied over 10%, prices may hold momentum, which would put the focus on the 2025 swing high from February at 105.30.
The broader uptick in sentiment across financial markets may help to bolster Walmart’s outlook.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and #tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive Inc. and tastytrade Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.