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.
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.
Walmart /zigman2/quotes/207374728/composite WMT +1.21% 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%.
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.
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%.