Wal-Mart (WMT, Financial) is scheduled to report its fourth quarter earnings on Thursday, Feb. 19. Analysts estimate fourth quarter revenue to be $132.3 billion with full year revenue of $486.6 billion. Earnings per share for the quarter are expected to be $1.53 with full year earnings per share of $4.99.
The revenue estimate shows a revenue increase of 2.7% from the previous fourth quarter. For the full year, analysts expect a revenue increase of 2.2%. In fiscal year 2014 comparable quarter earnings per share were $1.34 on a GAAP basis and $1.60 on a non-GAAP basis. For the year earnings per share were $4.85 on a GAAP basis and $5.11 on a non-GAAP basis.
In 2015, a major focus for Wal-Mart was on the opening of new Wal-Mart Neighborhood Market stores. In September 2013 it reported plans to open approximately 200 new stores over the following 18 months with the majority of new stores opened in the 2015 fiscal year. The Neighborhood Market stores average 38,000 square feet providing consumers with a smaller concept store that can help to meet their everyday shopping needs.
Other key areas of emphasis for Wal-Mart’s fourth quarter will be on its e-commerce solutions and overall holiday sales report. For the 2015 year, Wal-Mart began testing a new e-commerce solution that allows customers to order groceries online and pickup at the store. The new e-commerce solution is expected to help Wal-Mart improve its digital shopping experience and total online customer sales.
In-store and online holiday sales for Wal-Mart are also expected to be a highlight for the quarter specifically following the announcement of record Cyber Monday sales from its digital platform. On Cyber Monday, Wal-Mart reported a 70% increase in same-day store pickup orders. For the Thanksgiving holiday Wal-Mart also reported its second-highest sales report in history.
Improved consumer confidence and lower gas prices are also expected to help fourth quarter sales. Year to date, Wal-Mart’s stock has a one year return of 13.22% with a most recent closing price of $85.81. Given a positive earnings report the stock is likely to advance further with an approximate discounted cash flow value estimate of $90.38.
