.png)
German (DE) 
English (US) 
Spanish (ES) 
French (FR) 
Hindi (IN) 
Italian (IT) 
Russian (RU) James Brumley, The Motley Fool
Mon, May 12, 2025, 1:12 AM 7 min read
In This Article:
-
Walmart’s management recently said that tariffs and their ensuing uncertainty make it difficult to maintain profit margins or predict profitability.
-
A handful of metrics provide a much clearer picture of the retailer’s true long-term health.
-
Don’t read too much into the stock’s initial response to the retailer’s upcoming Q1 earnings report, no matter which direction it moves.
We may be well into earnings season, but we haven't heard from every noteworthy name just yet. Mega-retailer Walmart (NYSE: WMT) is slated to report its fiscal first-quarter numbers on Thursday morning, offering a glimpse into consumers' current psyches and buying power.
I'm not as interested in the most-watched quarterly numbers this time around. I'm sure they'll be pretty good -- but not great -- and more or less in line with estimates.
Rather, I'm watching three other pieces of information that will provide a much better picture of how the company's doing in this tricky environment. These three data nuggets are also better barometers of Walmart's longer-term health than the more-touted quarterly numbers are.
Here's what I'm watching, and why.
For the three-month stretch ending in April, analysts expect Walmart to report earnings of $0.58 per share on sales of $164.5 billion. That's a 2% improvement on the year-ago revenue figure of $161.5 billion, but rising costs will likely drag the bottom line down from a per-share comp of $0.60. U.S. same-store sales growth also likely slowed a bit from the fourth quarter's pace of 4.9%, reflecting the broader effect of lingering inflation and fresh economic uncertainty on consumer spending.
None of these numbers is a key concern of mine right now, however. They'll only be a snapshot of how the world's biggest retailer has been affected by unexpectedly sudden and steep import tariffs that should (hopefully) soon be under control. Indeed, as Walmart CFO John David Rainey conceded in April, "[O]perating income has been harder to predict and we've widened our internal range of [profit] scenarios" thanks to tariff uncertainty. If the company isn't quite sure where the bottom line is headed, neither investors nor analysts will want to count on any particular figure. Sales aren't etched in stone, either.
Rather, there are three other metrics I believe mean much more to long-term investors.
The first metric is the growth of Walmart's retail media business. You know it better as "advertising."
Comments