Walmart is slipping ahead of earnings

Shares of Walmart are slipping, down 0.64% at $US90.51 a piece, ahead of its third-quarter earnings report, which is scheduled to be released before the market opens on Thursday.

Wall Street is expecting adjusted earnings of $US0.97 per share on revenue of $US121 billion. Sentiment on Wall Street is mixed ahead of the results, with 15 of the 36 analysts polled by Bloomberg rating the company a “buy,” 17 rating it a “hold” and two rating it a “sell.”

The company has recently made a push to win the holiday season by throwing events around its stores and setting up demonstration areas where kids can try out toys. It is also offering significant discounts in stores and online, as well as instituting a new two-day free shipping policy with a $US35 online purchase and a discount when customers pick up items at its stores.

Like many big department store retailers, Walmart is contending with the rise of e-commerce and Amazon. Walmart recently announced that it would add “high-fashion” outlet Lord & Taylor and its many designer brands to its website in a push to reach a wealthier segment of the population.

Last year, Walmart acquired for $US3.3 billion in a bid to reach Jet’s younger and wealthier shoppers. Jet’s former CEO Marc Lore became Walmart’s head of e-commerce and under his tenure, he snapped up online startups, such as Bonobos, Moosejaw, ShoeBuy and ModCloth.

Lore said that Walmart has a solid strategy to go up against Amazon. The company not only has 90% of the US population within 10 miles of its stores, it also provides a unique, overall experience both online and in its stores, he said.

Oppenheimer Analyst Rupesh Parikh maintains that the company is poised to benefit from the brick-and-mortar turmoil that has rocked its industry, with Sears Holdings announcing new store closures and Toys R’ Us filing for bankruptcy. He is bullish on the stock, raising his price target to $US100 from $US90.

“We would expect WMT to pick up share and also gain clout with key vendors as they seek to ensure adequate brick & mortar distribution,” Parikh wrote in a note.

Walmart shares are up 31.88% this year.

To read more about what kind of business Amazon can’t touch, click here.

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