Walmart Inc (NYSE:WMT, ETR:WMT) looks set to see continued benefits from changing consumer habits in response to growing prices in next Thursday’s first quarter results, analysts say.
Earnings per share should sit at US$0.51 on an adjusted basis, according to Bank of America analysts, as comparable sales climb by 3.5%.
“We expect grocery share gains and trade-down to continue supporting Walmart's store and online transactions as consumers continue to manage grocery inflation,” analysts said.
That said, slowing grocery inflation will likely translate to decelerating growth against the fourth quarter’s 4% jump in sales, the bank noted.
Softer demand for general merchandise will also likely feature, with this offset by improvements from advertising, alongside third-party and fulfilment offerings.
“While we see continued softness in discretionary, we see support for Walmart’s general merchandise,” analysts said.
“Share gains [should] continue from initiatives, including store remodels, online expansion and strong pickup and delivery execution” too, the bank added.
A ‘buy’ rating was reiterated, alongside a US$67 share price target, which marks a prospective gain of 10.8% on Friday’s close.