Walmart Q1 Earnings Likely Boosted By Inflation
Our preview of the upcoming week's earnings reports includes Walmart (WMT), Lowe's (LOW) and Kohl's (KSS).


The latest consumer price index (CPI) released last week indicates inflation remained sky-high in April. And while rising prices were a headwind for most companies in the first three months of 2022, they likely served as a tailwind for mega-retailer Walmart (WMT, $147.48).
Wall Street will find out this week, with WMT an early entrant on the earnings calendar; WMT will report its first-quarter results ahead of the May 17 open.
The consumer staples stock has shown resilience amid the recent market volatility, up roughly 2% for the year-to-date compared to a more than 17% decline for the broader S&P 500.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
WMT beat on both the top and bottom lines in its fourth quarter thanks in part to its ability to keep prices competitive in a high-inflation environment. And this trend probably continued in Q1, despite a challenging backdrop, says UBS Global Research analyst Michael Lasser (Buy).
"With low prices as its core value proposition, WMT is uniquely positioned to benefit from rising inflation," the analyst adds. "Its scale helps give it the ability to keep healthy price gaps versus its peers, which can help it achieve further share gains in the grocery channel.
While Lasser admits there will likely be some "moving pieces" in the report – including unpredictability related to macro headwinds – components such as U.S. same-store sales and full-year guidance will be good.
"We view WMT's shares as compelling as they offer more certainty than others in this uncertain backdrop," the analyst says.
Amid tough year-over-year (YoY) comparisons that include last year's stimulus-related pop, consensus estimates are for Walmart to report a 12.4% drop in earnings to $1.48 per share. Revenue is expected to arrive at $138.8 billion (+0.4% YoY).
Lowe's Faces Tough Comps in Q1
First-quarter earnings from Lowe's (LOW, $191.70) are due out before Wednesday's open. Similar to Walmart, the home improvement retailer is facing hard comparisons from Q1 2021.
As such, analysts, on average, are calling for a slim 0.9% YoY rise in earnings to $3.24 per share. And revenue is projected to be flat at $23.8 billion.
Still, Lowe's entered 2022 with momentum following a solid fourth-quarter print, says UBS Global Research analyst Michael Lasser (Buy).
Additionally, the consumer discretionary name raised its full-year guidance in February. This reflects an inflation tailwind due to LOW's "prudent pricing power" that will likely last for at least a few more quarters, the analyst adds.
"We believe LOW is building a track record of solid execution with every passing quarter," Lasser says. "Plus, it has several unique drivers to propel its results in the next few years independent of the market growth."
Kohl's Top and Bottom Lines Probably Contracted in Q1
Kohl's (KSS, $47.51) will report its first-quarter earnings ahead of the May 19 open.
The department store chain ended 2021 with record adjusted earnings of $7.33 per share and year-over-year revenue growth of 21.8% to $19.4 billion.
And Deutsche Bank analyst Gabriella Carbone (Buy) thinks the company is just getting started. "KSS has laid the groundwork for growth along with improving profitability, and is a more nimble company today than it was pre-pandemic," Carbone says.
Included in the company's plans to drive growth are goals for Kohl's to reach $2 billion in sales from its partnership with beauty company Sephora and expand its operating margin to a range of 7% to 8%.
Carbone adds that these goals "may prove to be prudent as management has greatly considered a number of headwinds," including supply-chain woes and a tight labor market.
As for the retail stock's first-quarter results, analysts, on average, expect earnings to arrive at 72 cents per share (-31.4% YoY) and revenue to land at $3.7 billion (-0.5% YoY).
In addition to the company's financial results, Wall Street will be looking for additional updates on the company's strategic initiatives. Last Wednesday, shareholders voted on Kohl's new slate of directors, rejecting an attempt from Macellum Advisors to add its nominees to the board. The activist investor has been pushing KSS to make changes, including unloading some of its real estate and putting itself up for sale.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Is It Worth Getting a Free iPhone Through T-Mobile?
T-Mobile offers a free iPhone 16 Pro with select plans, including a 55+ option. Is the incentive worth the switch over?
-
What About Those ‘Guaranteed’ Life Insurance Ads?
Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade Talks
Despite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
Stock Market Today: S&P 500, Nasdaq Near New Highs
The S&P 500 hasn't hit a new high since February. It's been since December for the Nasdaq.
-
Stock Market Today: Stocks Struggle to Sustain Gains
Mixed messages from multiple sources continue to make for a messy market for investors, traders and speculators.
-
Stock Market Today: Stocks Soar on Israel-Iran Ceasefire
It was a rocky start to the truce, but a temporary halt to fighting between Israel and Iran appears to be holding for now.
-
The Riskiest S&P 500 Stocks Right Now
Buyer beware: These are five of the riskiest stocks in the S&P 500 at the moment, based on one measure of volatility.
-
Stock Market Today: Stocks Rise on a Little More Uncertainty
The best response to a major geopolitical event is often no response at all, especially if you're looking at the big picture.
-
Stock Market Today: Stocks Chop as Chipmakers Decline
Several semiconductor stocks fell Friday on reports that the White House may consider revising license waivers for global chipmakers.
-
Stock Market Today: Stocks Grapple for Peace Trade Gains
Of course dramatic tension is high on Fed Day, only this time it's about war and peace as well as monetary policy.