Is Walmart Losing Steam? Here's What Q3 Earnings Could Reveal

Wall Street is expecting Walmart to post $0.61 EPS when it reports Q3 earnings—a solid 5.2% YoY bump. Revenue’s projected to hit $177.14 billion (+4.5% YoY), which sounds healthy on the surface. But dig deeper and the picture gets more interesting.

The Slowdown Nobody’s Talking About

Here’s where it gets spicy: analysts are predicting Walmart U.S. comparable store sales (excluding fuel) at 4.0%, down sharply from 5.3% a year ago. That’s a 120 basis point deceleration—a significant slowdown in core retail momentum.

Sam’s Club tells a similar story. Expected comp sales of 4.0% versus 7.0% last year. Translation: the membership club is cooling off real fast.

Even Walmart International isn’t firing on all cylinders. Projected sales growth of 5.9% vs. 8.0% previously. The trend across the board? Comp sales are contracting.

The Silver Lining

Not all dark clouds though. Membership and other income is expected to grow 7.7% YoY to $1.71 billion—one of the fastest-growing segments. This higher-margin business is partially offsetting retail pressure.

Store expansion continues: Sam’s Club adding stores (602 vs. 600), International growing to 5,628 locations (from 5,454). Physical footprint still expanding, even if same-store sales are decelerating.

What It Means for Your Portfolio

Walmart stock is down 4.9% over the past month while the S&P 500 gained 1.5%—underperformance that reflects investor concerns. Zacks assigned it a Hold rating (#3 rank), suggesting limited upside catalysts.

The core issue: consumer spending is normalizing post-inflation boom. Walmart’s benefiting from traffic, but transaction growth is slowing. Before earnings hit, watch for any further EPS estimate cuts—analysts have barely tweaked expectations (+0.2% over 30 days), suggesting they’re still calibrating to this new reality.

Bottom line: Walmart remains a defensive play in uncertain times, but the days of 5%+ comp sales acceleration may be behind us.