Earnings on Tap: Wal-Mart Stores
Will domestic sales continue to be anemic for the world's largest retailer?
Market Update
Retail giant Wal-Mart (WMT) is slated to report first-quarter earnings before the stock market opens Tuesday, with a consensus of Wall Street analysts calling for earnings of $0.96 per share, rising from $0.88 per share in the year-ago quarter.
Despite the expected profit rise, analysts are likely to key in on sales for existing Wal-Mart stores in the United States, which are expected to post a decline for the eighth straight quarter.
On the earnings call, management may also comment on recent efforts to gain sales traction, such as bringing back on the shelf several goods cut out in its streamlining process during the financial crisis.
Wal-Mart earnings also provide a strong indicator of consumer sentiment in the country, and continued sales weakness may imply that some consumers took to online shopping, rather than physical visits to stores, in the face of the subdued economic recovery.
Morningstar analyst R.J. Hottovy feels Wal-Mart shares are currently fairly valued. In a recent Stock Analyst Note, he wrote that sales growth within the United States is expected to grow at the inflationary rate over the next few years, while revenue from overseas may climb.