Why Walmart’s lackluster guidance may not be that scary
Walmart is tumbling after management said adjusted earnings per share for its current fiscal year would come in around $2.50 to $2.60, while analysts expected $2.77.
The underwhelming outlook from this bellwether retailer is causing some spillovers to other parts of the market, like banks, as investors fret about the health of the US economy.
One observation that might temper some of this concern: in the past two years, Walmart has sandbagged traders with its initial guidance. On average, its actual full-year adjusted earnings per share have exceeded its first projection by 10% for its fiscal 2024 and 2025, which just concluded as of January 31.
If Walmart exceeds the midpoint of its initial guidance by about 10% this time around, adjusted earnings per share will come in at $2.805, a few cents higher than Wall Street is currently penciling in.
Calendar-year EPS forecasts for the S&P 500 as a whole tended to be revised lower in each of the past two years as time progressed, while Walmart’s projections have done the opposite.
