[Note: Walmart’s Fiscal Year 2025 concluded on January 31, 2025]
Walmart (NYSE: WMT) is set to publish its fiscal first-quarter earnings on Thursday, May 15, 2025, with analysts anticipating earnings of 58 cents per share on $164.47 billion in revenue. This would indicate an 8% year-over-year reduction in earnings and a 2% rise in sales as compared to the previous year’s figures of 63 cents per share and $161.51 billion in revenue. Historically, WMT stock has risen 50% of the time following earnings releases, with a median single-day increase of 3.6% and a maximum recorded increase of 7%.
Walmart’s management recently pointed out that ongoing tariffs and the resulting uncertainty are causing notable challenges in sustaining profit margins and accurately forecasting future profitability. Increasing costs are expected to put pressure on the company’s bottom line, reflecting the broader effect of continued inflation and renewed economic volatility on consumer spending. In spite of these headwinds, Walmart remains financially strong, with a current market capitalization of $774 billion. Over the past twelve months, the company generated $681 billion in revenue, achieved $27 billion in operating profit, and reported a net income of $16 billion.
For traders focused on events, historical trends may provide an advantage, either by positioning prior to earnings or responding to moves after they are released. That being said, if you are looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and produced returns exceeding 91% since its inception.
See earnings reaction history of all stocks.
Walmart’s Historical Odds of Positive Post-Earnings Return
Here are some insights on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 10 positive and 10 negative one-day (1D) returns noted. In summary, positive 1D returns occurred approximately 50% of the time.
- Notably, this percentage rises to 67% if we consider data for the last 3 years instead of 5.
- The median of the 10 positive returns = 3.6%, and the median of the 10 negative returns = -2.4%
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns post earnings is summarized, together with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky tactic (although not useful if the correlation is weak) is to understand the correlation between short-term and medium-term returns post earnings, identify a pair with the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D reveal the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D pertains to the correlation between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
At times, peer performance can influence post-earnings stock reactions. In reality, the pricing-in might start before the earnings are announced. Here is some historical data regarding Walmart’s post-earnings performance compared with the stock performance of peers that reported earnings just prior to Walmart. For a fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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