If founder and legendary store walker Sam Walton were alive today, he might take issue with such high praise from analysts and investment bankers.
The world’s largest retailer will announce its second-quarter earnings on Aug, 14 before the start of trading. Per Bloomberg estimates, Walmart is projected by Wall Street to report earnings per share of $1.21 on net sales of $119 billion.
Walmart hinted at operational challenges at its most profitable U.S. business in its July 24 decision to replace division president and chief executive officer Bill Simon with international figure Greg Foran. Despite such challenges, which have included three straight quarters of declining same-store sales, the Street’s second-quarter earnings per share estimate for Walmart is leaning toward the upper-end of the company’s $1.15-to-$1.25 guidance. When Walmart announced that earnings per share range on May 15, it was below the consensus of $1.28.
Given what can be seen at the store level, Wall Street may be in for an unfortunate series of surprises across the board this Thursday morning as well, including a possibly sluggish second-quarter performance and below-consensus earnings per share outlooks for the third quarter and full year.
From the addition of more clearance zones at the front of the store toward the final weeks the second quarter to mangled summer clothing racks to the over-ordering of back-to-school and seasonal outdoor categories, Walmart continues to deal with operational mistakes. Those likely arise from being out of touch with the financial stresses of its core low-income consumer. Ultimately, the persistence of these operational issues could be seen in the long-term financials of Walmart.