Walmart’s earnings will show how the US consumer is doing

Walmart is going through a lot these days, but so are its customers. Both topics are likely to take center stage when the retail giant reports third-quarter results on Thursday.

The update comes during a period of transition for both the company and the economy. Longtime Walmart (WMT) CEO Doug McMillon will step down at the end of January and advise his replacement: John Furner, who has been with the company for about 45 years.

The company is changing CEOs during one of its most successful periods. Walmart shares hit an all-time high last month — though they have since fallen about 8% — after it said it was working with OpenAI to reach those who shop through ChatGPT. Walmart’s e-commerce and delivery businesses have boomed, attracting higher-income customers. The company also gained market share with middle- and low-income consumers.

But the company has also seen signs that consumers are becoming increasingly cautious. McMillon said in August that some middle- and lower-income shoppers avoided purchasing goods after their prices rose because of the tariffs.

Americans showed a range of reactions to the economy that were difficult to read, in part because data was not released during the government shutdown. Unemployment remains relatively low, but major companies have laid off thousands, and hiring has slowed. Tariffs are putting pressure on prices, but have not yet led to the inflation that some have predicted.

Consumer confidence collapsed to a record low in November, even as Americans continued to spend more on retail purchases. This may reflect the confidence and spending of wealthy consumers, who have benefited from stock market gains. It may be downsized if the recent market decline continues.

Analysts expect Walmart to report revenue of $177.5 billion, an increase of about 4.7% from the previous year, according to a consensus analyst estimate compiled by Visible Alpha. They expect this to come out to about $0.60 in earnings per diluted share, up from $0.58 a year earlier, per Visible Alpha. U.S. same-store sales are expected to rise about 3.9%, according to consensus estimates from Visible Alpha.

Walmart is scheduled to release its numbers and address investors before the opening bell. Wall Street analysts are broadly bullish on the stock, with all analysts tracked by Visible Alpha maintaining bullish ratings.