Walmart, Home Depot Earnings Breakdown:

  • Walmart posted revenue of $140.4bn; EPS of $1.11
  • Home Depot posted revenue of $36.82bn; EPS of $3.92

US company earnings have been largely positive as Q3 figures continue to make their way across the news lines. This week sees Walmart, Home Depot, Nvidia, Lowe’s, Cisco, JD.com and Macy’s as some of the major headliners.

Walmart Earnings Report:

Oct 2021

July 2021

April 2021

Earnings

$140.5bn

Expected EPS

$1.18

$1.57

$1.21

Earnings Per Share (EPS)

$1.11

$1.78

$1.69

Walmart reported revenue for the third quarter of $140.4bn with an EPS of $1.11, slightly lower than anticipated. Nevertheless, Walmart US foresees growth in its Q4 sales figure of around 5% after seeing a 9.2% increase in the Q3 comp figure. Positive news for holiday shoppers in that the large US retailer reported an increase in inventory of 11.5% as supply remains more of a concern than the reduced discounts likely to be on offer this year.

Mastercard Spendingpulse data suggests that US retail sales over the Thanksgiving weekend alone will rise 10% from last year and by over 12% from the same week in 2019; as pent up consumer demand continues into the start of the holiday period. Positive sales numbers will only show up in the earnings data for Q4 which is likely to be strong as the holiday period brings the year to a close.

Walmart does appear to be coming off yearly highs. Bulls may eye 144.50 for a potential reversal of the shorter term downtrend as a bullish continuation play as we head into the retail frenzy over the holidays.

Walmart Daily Chart

Chart prepared by Richard Snow, IG

Home Depot Earnings Report:

Oct 2021

July 2021

April 2021

Earnings

Expected EPS

$3.40 (adj)

$4.44

$3.08

Earnings Per Share (EPS)

$3.92 (adj)

$4.53

$3.86

Q3 sales rose 9.8% to reach $36.82bn. Quarterly comparable sales in the US increased by 5.5%. Home Depot benefitted from increased home improvements over the lockdown period while interest rates remained low.

Looking at the chart, prices seem elevated and consolidating near the yearly high. Directional clues could become clearer after a break above or breakdown of the current consolidation zone.

Home Depot Daily Chart

Walmart and Home Depot Earnings Snapshot: Strong Figures Ahead of the Holiday Period

Chart prepared by Richard Snow, IG

Pent up Consumer Demand, Inflation and Gross Margins

The main themes across the economy throughout Q3 have been increasing consumer demand and supply shortages/constraints which have led to rising input costs (cost push inflation) which, in turn, gets passed on to the consumer at the checkout counter. However, the decision to pass on all or most of the price increases to consumers comes at a cost. Higher prices can negatively impact sales and deciding to absorb higher input costs can weigh on a company’s gross margins.

— Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX



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