Earnings Preview: Wal-Mart

Wal-Mart Stores (WMT) is expected to report Q1 earnings before market open Tuesday, May 13, with a pre-recorded conference call scheduled for 7:30 am ET on Tuesday.

Guidance

Analysts are looking for a profit of 75c on revenue of $92.44B. The consensus range is 73c to 77c for EPS, and $91.23B to $93.68B for revenue, according to First Call.

On April 10, Wal-Mart raised its Q1 EPS guidance to 74c to 76c, from 70c to 74c. Wal-Mart will be expected to address whether it has seen reduced consumer spending this quarter; with consumers facing higher food and gas prices and weakness in the credit, housing and job markets. It is unclear if the effect for Wal-Mart is negative or positive, as although consumers have cut back on discretionary items, many are switching to wholesale clubs and discount apparel chains.

Analyst Views

Deutsche Bank said in a note that it worried about the earnings multiples for its discretionary retail names, and recommended defensive names such as Wal-Mart and CVS (CVS).