Walmart Earnings Preview: Will Tax Hikes And Slower Sales Hurt WMT Q1 Profit?

Category: Companies / May 15, 2013 4:12PM EDT


Highly anticipated earnings results from Wal-Mart Stores, Inc. (NYSE: WMT), the world’s largest retailer, have analysts with mixed expectations.

Here’s an earnings preview for Wal-Mart:

Retail giant Wal-Mart will release first-quarter fiscal 2014 results before the market opens on Thursday, May 16 amid concern that the company will report slower growth after tax hikes, from the expiration of the payroll tax cuts, and a delay in tax refunds may have hurt consumer’s pocketbooks.

Wal-Mart blamed tax hikes for disappointing February sales, which hurt lower and middle income shoppers, when the company released its fiscal 2013 fourth-quarter earnings announcement,

The Wall Street consensus from Zacks Investment Research forecasts the retail giant to report EPS of $1.15, up 5.5 percent from a year ago, and analysts are projecting earnings of $5.34 per share for the fiscal year.

Revenue is projected to be 3 percent above the year-earlier total of $113.02 billion at $116.42 billion for the quarter, and for the year, revenue is expected to come in at $493.04 billion.

Investors will be eyeing how cold weather and a slowdown in international expansion will affect the retail giant’s earnings, according to Forbes. Colder weather over the past two months likely hurt sales as rival Target Corporation (NYSE: TGT) warned that sales and earnings for the first quarter will be below forecasts after winter weather delayed spring shopping. Target said in a release Tuesday, April 16 that it expects first-quarter earnings per share to come in slightly below the low end of its previous guidance of $1.10 to $1.20 when it reports earnings on May 22. It did not change its full-year guidance.

Analysts also attribute Wal-Mart’s slowdown in international store expansion will impact the retailer’s revenue growth in when it reports first-quarter results.