Walmart Stock Outpaces Peers Ahead of Quarterly Earnings Report

Walmart (WMT) shares have demonstrated strong performance this year, significantly outperforming broader market indexes and competitors like Target (TGT) and Amazon (AMZN). As the company prepares to release its quarterly results on Thursday, May 15th, market watchers are keen to see if Walmart can continue this upward trend. Following the last quarterly report on February 20th, Walmart shares declined, despite a series of generally positive earnings outcomes. Target will report its results on May 21st.

The year-to-date performance chart shows Walmart shares up +7.2%, contrasting with the S&P 500 index down -4.3%, Amazon down -12.3%, and Target down -28.6%:

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Walmart is set to kick off the Q1 reporting cycle for conventional retailers, with other companies following suit in subsequent weeks. The upcoming report is crucial as it will provide insights into the effects of the new tariff regime and broader trends in consumer spending. During the April 9th investor day event, management discussed some of these trends and acknowledged short-term tariff-related challenges.

Despite the current macro uncertainties, management remains optimistic about achieving long-term targets, committing to at least +4% sales growth and operating income growth exceeding sales growth. Over the past two years, Walmart has surpassed its goals, with sales increasing by +5.5% and operating income rising by +9.5%.

Two-thirds of Walmart’s U.S. sales come from domestically sourced products, providing some protection against tariff impacts compared to competitors. A significant contributor to this insulation is Walmart’s grocery business, which comprises nearly 60% of total sales, whereas grocery sales represent a smaller portion of Target’s revenue. Walmart also plans to maintain its price advantage over rivals, leveraging its scale, supplier relationships, and enhanced logistical automation. This value-oriented approach, along with an effective digital strategy, has been essential for gaining market share in groceries and attracting higher-income households.

In addition to grocery sales growth, Walmart’s expanding e-commerce operations are not just attracting affluent consumers. They also provide opportunities for higher-margin revenue sources, such as advertising and third-party fulfillment. Currently, e-commerce accounts for roughly 15% of total sales, with management expecting this figure to more than double in the long term.

Walmart is projected to report earnings per share (EPS) of $0.58 on revenues of $165.6 billion. These figures indicate year-over-year changes of -3.3% for EPS and +2.5% for revenue. This EPS estimate aligns with management’s earlier guidance of $0.57 to $0.58 per share, although it wasn’t reiterated during the April 9th event, and projections have slightly decreased as the quarter progressed.

Management has indicated a less favorable business mix for the most recent quarter, as the general merchandise sector experienced a weak start, although trends improved later on. A positive report for general merchandise could also positively impact Target. Same-store sales, excluding fuel, are expected to rise by +3.21% this quarter, down from +4.9% in the previous period, but higher than the expected +4.36%.

Regarding the Retail Sector 2025 Q1 Earnings Scorecard, results from 20 of the 33 retailers in the S&P 500 have been released. The Zacks Retail sector includes Walmart, Target, other traditional retailers, online vendors like Amazon, and restaurant chains.

So far, these 20 Zacks Retail companies have reported total Q1 earnings growth of +20.2% compared to the same period last year, with revenues up by +6.9%. Approximately 55% surpassed EPS estimates, while 45% exceeded revenue expectations.

Historical performance for these companies shows that the recent EPS and revenue beats are below historical averages:

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While the overall earnings growth rate appears robust, removing Amazon from the analysis alters the picture. Amazon’s Q1 results showed a +42.6% EPS increase and +8.6% revenue growth, surpassing expectations.

The convergence of digital and physical retail continues. Amazon has established a significant brick-and-mortar presence with Whole Foods, while Walmart expands its online sales. Walmart’s growing digital initiatives are elevating its position in advertising, a trend accelerated during the COVID-19 pandemic.

The following charts illustrate Q1 earnings and revenue growth compared to prior periods, both including and excluding Amazon’s results:

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The results excluding Amazon indicate earnings down -6.3% alongside a +5.4% increase in revenue, highlighting margin pressures within the sector.

Key Earnings Reports This Week

Over 500 companies are set to release their results this week, including 11 S&P 500 members. Alongside Walmart, notable companies reporting include Cisco Systems, Applied Materials, Deere & Company, and Alibaba.

The Q1 Earnings Scorecard

As of Friday, May 9th, Q1 results from 452 S&P 500 members, accounting for 90.4% of the index, show a total earnings increase of +12.2% from the previous year, supported by +4.4% revenue growth. A total of 73.7% of these companies exceeded EPS estimates, while 61.9% surpassed revenue projections.

The comparison charts below illustrate the Q1 earnings and revenue growth rates for these S&P 500 members in a historical context: