00:00 Speaker A
Walmart set to report first quarter results on Thursday before the market opens. Analysts expecting strong results as consumers shop for value. Joining us now, Corey Tarlow, Jeffries’s senior VP of equity research, who has a buy rating on Walmart and $120 price target. Corey, great to speak with you. What’s the biggest thing you’re watching out for in this print?
00:29 Corey Tarlow
Good morning and thank you for having me. So, I don’t think that this quarter is going to be great overall. Um, but I do think that sales should be very strong, which is important because in an environment like this, when you have volatility, you have weather and fears around tariffs, uh, there’s a lot that can impact the way a consumer spends, the way a consumer thinks and right now we’re seeing a really significant shift into food away from general merchandise. Um, so that should be very good for the nation’s largest grocer. That being said, when you see that shift into food and away from general merchandise, it also comes at a margin headwind. Uh, and then the company also has a liability claims issue that that it will be taking a little bit of a hit on in the second quarter in the first quarter, excuse me. Um, and then they also want some flexibility due to tariffs, um, to invest in price. And so you’re likely to see still strong sales, but there’s probably a wider range of potential outcomes for profit in the first quarter that I think we need to be cognizant of. And the next question becomes, well, what does the outlook look like? And there’s a lot of uncertainty as it relates to that. But I was with Walmart management in Dallas, uh, about a month ago and they reaffirmed the outlook for the full year. Now, this was about a week post April 2nd. So, um, still have a little bit of time to digest the the news that we had seen. So I think this will be a really interesting quarter to get a sense for to for how Walmart thinks about the impact of tariffs on the full year outlook.
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