MW Can anything stop Walmart's rally? Maybe high expectations, some analysts say.

By Bill Peters

Earnings Watch: Walmart, Live Nation and Hasbro report results this week

The past three years of higher prices have been great for Walmart Inc.

Over that time, Walmart shares $(WMT)$ have more than doubled in value. As shoppers seek savings wherever they can find them, the retail giant has eaten the lunch of its smaller rivals, threatening to take business from beauty retailers, dollar stores and convenience stores. It has also increasingly drawn wealthier shoppers and begun selling digital ads.

But even as high expectations for 2025 and steeper tariffs hang over of the big-box chain's latest quarterly results, set for Thursday, Wall Street analysts are struggling to find any reason to expect Walmart to slow down, as consumers gravitate toward a handful of mass retailers at the expense of smaller ones.

"Our market-share math continues to point to big gains by few players, namely Walmart, Costco and Amazon," BMO analyst Kelly Bania said in a research note on Thursday.

She estimated that 35% to 40% of the market share for U.S. food and consumables sales was held by Walmart's U.S. stores and Sam's Club locations, as well as Costco Wholesale Corp. $(COST)$ and Amazon.com Inc. $(AMZN)$

Those "share gains across income cohorts should continue," BofA analysts wrote in their own note on Thursday.

They said sales in Walmart's large grocery segment should stay strong as shoppers continue to prioritize basics, and were upbeat on demand within its health and wellness sections. They also noted that during the end of last year's shorter traditional holiday-shopping season, Walmart customers were still shopping - a sign that they may have been using its quicker service options to secure gifts in time.

The BofA analysts added that services like digital advertising - a segment that allows brands to pay Walmart to advertise their products in stores and online - could help counterbalance more sluggish sales for items outside groceries, where demand has been hurt by the flight to essentials.

Still, Bania said a 10% tariff on imports from China - part of President Donald Trump's efforts to extract better trade deals for the U.S. - could shave a little off Walmart's profits, as could a tougher foreign-exchange backdrop. Walmart's chief financial officer told CNBC last year that the company could increase prices on some products in response to more aggressive tariffs.

BofA analysts, meanwhile, said Walmart's rivals could always step up their discounting efforts, noting that their research points to "many food retailers narrowing price gaps to [Walmart] versus COVID levels."

And as the stock hovers near record highs, there's also less room for any cracks in its financials. The BofA analysts said Walmart faces tough comparisons, adding that "high expectations for [Walmart] going forward could limit potential for upward stock-price momentum relative to peers."

This week in earnings

Forty-six S&P 500 companies report results this week, according to FactSet.

After McDonald's Corp. $(MCD)$ said it could widen its profit margin this year, amid a fast-food discount war and struggles among lower-income consumers, other chains - the likes of Wingstop Inc. $(WING.UK)$, Cheesecake Factory Inc. $(CAKE)$, Shake Shack Inc. (SHAK) and Texas Roadhouse Inc. $(TXRH)$ - will offer their take on the current landscape for dining out.

Elsewhere, payments service Block Inc. $(XYZ)$ and e-commerce sites Wayfair Inc. (W) and Etsy Inc. $(ETSY)$ will report results, as inflation continues to keep a lid on discretionary spending and hits smaller businesses harder.

German sandal and clog designer Birkenstock Holding Plc $(BIRK)$ will report as it tries to produce a wider variety of footwear. Earnings are also due from Freshpet Inc. (FRPT), which sells higher-quality dog food, as analysts weigh a broader trend of pet pampering against concerns about recent sales trends.

Electric-truck maker Rivian Automotive Inc. $(RIVN)$, online used-car retailer Carvana Co. (CVNA) and mattress maker Tempur Sealy International Inc. $(TPX)$ are also reporting results this week.

The call to put on your calendar

Live Nation: Ticketmaster parent Live Nation Entertainment Inc. (LYV) reports quarterly results on Thursday. Ahead of the results, Oppenheimer analysts pointed to a bigger pipeline of larger concerts, including those in stadiums, and longer tours, as musical artists try to play more shows to make up for what little they typically make from streaming. But even as artists have to work harder, those dynamics could make 2025 a record year for concert demand, the analysts said. Live Nation will also report earnings after the Justice Department last year hit the company with an antitrust lawsuit. While the new Trump administration has promised lighter regulations, the Oppenheimer analysts noted that the DOJ's case "appears bipartisan."

The number to watch

Hasbro's sales and outlook: When Mattel Inc. $(MAT)$ reported quarterly results this month, investors cheered the toy maker's forecast. When rival Hasbro Inc. $(HAS)$ reports on Thursday, investors could be looking for something similar.

Mattel's profit forecast came in above expectations, and the company said it had options at its disposal, including possible price increases, to cushion the blow from President Trump's new tariffs. It also said it expects this year to be better for Barbie, as it tries to maintain the growth from the massive popularity of Greta Gerwig's 2023 "Barbie" film.

For Hasbro, the focus will be on its games, UBS analyst Arpine Kocharyan said in a note last week.

"While holiday season has been in focus, with an overall mildly positive read-through for Hasbro, what matters more for 2025 outlook is the company's gaming portfolio, currently making up close to 75% of profitability," she said. "The big questions on gaming looking into [this year] are underlying growth in Magic: The Gathering, margin profile of incremental revenue and outlook for Monopoly Go and broader digital gaming."

-Bill Peters

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February 16, 2025 10:00 ET (15:00 GMT)

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