Walmart (NYSE:WMT) is scheduled to report quarterly earnings Tuesday morning before the market opens. Seems like the retailer is in decent shape heading out of the holiday season, especially comparing to its online competitor Amazon (NASDAQ:AMZN).
Based on the company’s data, Walmart overtook Apple (NASDAQ:AAPL) to become the No. 3 internet retailer, behind only Amazon and eBay (NASDAQ:EBAY). Last year, the company showed roughly a 4 percent growth of all e-commerce sales in the U.S. and 0.4 percent of the total U.S. retail market.
Analysts are expecting Walmart to report earnings per share of $1.33 on the revenue of $138.7 billion, according to Refinitiv. Same-store sales are expected to grow by 2.9 percent overall.
According to Cowen and Co. analyst Oliver Chen, Walmart is keeping up against Amazon. Cowen in his research of U.S. consumers during the fourth quarter discovered that the number of shoppers who buy things on both Amazon and Walmart is declining, while the satisfaction scores are trending higher for Walmart.
“Shoppers are clearly noticing Walmart’s price investments,” Chen said. “That and more convenient shipping options – like buy online, pick up in store – being rolled out at Walmart stores across the country.”
Last year, Walmart was targeting e-commerce sales growth of 40 percent. Analysts will be looking on Tuesday to see if it got there. The company has invested a lot to add more products to its website in order to achieve that target. It’s also been on a buying spree of online brands like Art.com and Bare Necessities.
Another coming barrier for Walmart could be the recent U.S. government shutdown, the longest in history, running from Dec. 22 to Jan. 25 and putting some Americans without an income during that time. There’s also concern that tax refunds are increasing this year, and that might be a reason for consumers to spend less money at stores like Walmart.
Walmart, though, with its large grocery and everyday essentials business, is less susceptible to suffering from shoppers pulling back on spending on items they don’t need.
Analysts are also expecting to see what Walmart has to say about more tariffs on goods from China and India’s tightening e-commerce regulations, in light of Walmart’s $16 billion acquisition of Flipkart. India has said it will now ban internet retailers like Flipkart from selling products from companies in which they hold an equity interest.
Walmart shares are up more than 5 percent so far this year.