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Aug. 16, 2021, 3:56 p.m. EDT

Walmart preview: U.S. sales growth at Walmart could outdo Amazon

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Tonya Garcia

Walmart Inc.’s U.S. sales growth could outdo Amazon.com Inc. when the retail giant reports its fiscal second-quarter earnings on Tuesday, Aug. 17.

Amazon /zigman2/quotes/210331248/composite AMZN -5.95% reported second-quarter sales growth on July 29 that slowed to 27% from more than 40% in recent quarters.

Bank of America analysts say “Walmart U.S. sales growth may outpace Amazon’s total ‘online stores’ growth” with help from added merchandise, same-day delivery and pickup and other offers.

“We believe Walmart’s omnichannel transformation in the U.S. will continue to gain momentum and support more sustainable and predictable positive same-store sales and traffic at U.S. Supercenters and U.S. e-commerce and GMV growth that should support P/E multiple expansion,” analysts wrote in a note.

See: Amazon’s supply chain is operating near capacity and impacting some big decisions, experts say

Walmart /zigman2/quotes/207374728/composite WMT -0.73% is also getting a boost from re-gains in grocery market share as lower-income consumers adopt online shopping habits and should see third-quarter upside from back-to-school and general merchandise sales.

Bank of America rates Walmart stock at buy with a price objective of $185.

To be sure, Amazon is still dominating e-commerce. The latest from eMarketer shows that Amazon will account for 41.4% of all U.S. e-commerce sales in 2021. Walmart comes in second at 7.2%.

And: Walmart says it’s hiring director to shape cryptocurrency strategy

But, data provided by Consumer Intelligence Research Partners (CIRP) shows that Walmart’s e-commerce site “continues to show signs of strength” with shoppers spending about $1,300 per year and average annual spend rising over the past couple of quarters as COVID-19 drives consumers online. That figure is on top of what is spent in stores.

The group also estimates that Walmart+, the company’s Prime rival, has between 8.5 million and 9.5 million members. That’s up from 7.4 million to 8.2 million in January.

Also: ‘A great time to buy,’ says one Wall Street analyst as Amazon shares tumble on disappointment

Here are other items to watch for when Walmart reports its earnings:

Earnings: The FactSet consensus is for earnings per share of $1.57, down from $2.06 last year.

Estimize, which crowdsources estimates from sell-side and buy-side analysts, hedge-fund managers, executives, academics and others, forecasts EPS of $1.65.

Revenue: The FactSet revenue consensus is $136.87 billion, down from $137.70 billion last year.

FactSet’s global same-store sales consensus is for 3.2% growth, with the U.S. up 3% and international sales up 5%.

/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,852.86
-180.49 -5.95%
Volume: 8.20M
Jan. 21, 2022 4:00p
P/E Ratio
55.78
Dividend Yield
N/A
Market Cap
$1446.82 billion
Rev. per Employee
$352,824
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/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 140.19
-1.03 -0.73%
Volume: 9.17M
Jan. 21, 2022 4:00p
P/E Ratio
49.09
Dividend Yield
1.57%
Market Cap
$388.87 billion
Rev. per Employee
$248,679
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