Core Points - Walmart is increasing compensation for its market managers, raising the salary range from $130,000–$260,000 to $160,000–$260,000, with most of the 440 market managers already within this range [1][3] - The annual stock grant for market managers will increase from $75,000 to $100,000, and the bonus potential will rise from 90% to 100% of their salary, bringing total compensation to around $620,000 [2][3] - These changes will take effect at the start of fiscal year 2026, with the new bonus potential reflected in March 2025 payouts and the stock grant issued in April 2025 [3] - This adjustment is part of a broader investment strategy in employee compensation that began in 2015, coinciding with strong retail sales growth and a tight labor market [4] - Additionally, U.S. store managers will see their average salary increase from $117,000 to $128,000 starting February 1, with potential bonuses reaching up to 200% of base salary based on performance [6] - Walmart's minimum wage is set at $14 per hour, with starting pay potentially reaching $19 per hour depending on location [9]

Stock Performance - Walmart's shares have rallied 13% over the past three months, outperforming the broader industry's rise of 11.7%, the Zacks Retail – Wholesale sector's growth of 11%, and the S&P 500's increase of 5.7% [1] - WMT stock closed at $93.81, just 2.5% below its 52-week high of $96.18, and trades above its 50 and 200-day moving averages, indicating strong upward momentum and price stability [4] Growth Drivers - Walmart's omnichannel strategy integrates online and in-store shopping, with initiatives like curbside pickup, delivery services, and Sam's Club "Just Go" checkout system enhancing customer convenience [6] - Global e-commerce sales grew 27% in Q3 FY2025, driven by expanded pickup and delivery options, a thriving marketplace, and advanced supply-chain automation [7] - High-margin businesses, including advertising, membership programs, and marketplace services, contributed to a 28% rise in advertising revenues and double-digit growth in Walmart+ and Sam's Club memberships [8] Financial Outlook - For FY2025, Walmart expects consolidated net sales growth of 4.8-5.1% (at constant currency), adjusted operating income growth of 8.5-9.25%, and adjusted EPS in the range of $2.42-$2.47, up from $2.22 in FY2024 [9] - Analysts have upgraded earnings estimates for the current fiscal year, reflecting optimism around Walmart's prospects [10] Valuation - Walmart's forward 12-month P/E ratio of 34.35 exceeds the industry average of 31.09, indicating market confidence in the company's long-term growth potential and resilience [11] Strategic Positioning - Walmart's expansive scale, digital transformation, and focus on value have made it a preferred destination for cost-conscious shoppers, with higher-income households now accounting for 75% of its U.S. market share gains [5][6] - International operations in key regions such as Mexico (Walmex), India (Flipkart and PhonePe), and China are vital components of Walmart's long-term growth strategy [8]

Core Viewpoint - Walmart has transformed from a traditional dividend-paying value stock to a high-growth stock, achieving a 71.9% surge in 2024, making it the second-best performer in the Dow Jones Industrial Average, raising questions about its ability to maintain this momentum in 2025 [1][2]. Group 1: Walmart's Performance and Strategy - Over the past five years, Walmart has navigated challenges such as the COVID-19 pandemic, supply chain issues, and inflation, while making significant investments to enhance its product offerings and convenience for consumers [3][4]. - Walmart's capital expenditures have significantly increased, focusing on new store openings, renovations, e-commerce, and technology investments, which have contributed to its recent success [4]. - The company has successfully attracted both low-income and higher-income consumers, gaining market share from competitors and achieving record revenue and profits despite challenges faced by other discount retailers [6][7]. Group 2: Financial Projections and Valuation - Analyst consensus estimates project Walmart's earnings per share (EPS) to be $2.48 for fiscal 2025 and $2.76 for fiscal 2026, following a record high EPS of $1.91 in fiscal 2024 [8]. - Walmart's current stock price reflects a high valuation, with a price-to-earnings (P/E) ratio of 33.3 based on projected fiscal 2026 earnings, which is considered expensive given the expected growth rate of 11.3% [10]. - To reach a $1 trillion market cap, Walmart's stock price would need to rise to approximately $124.50 per share, requiring significant EPS growth [11]. Group 3: Dividend and Investment Considerations - Despite being a Dividend King with 51 consecutive years of dividend increases, Walmart's current yield is only 0.9%, lower than the S&P 500's yield of 1.2%, making it less attractive for passive income investors [14]. - Investors should anticipate a sizable dividend increase when Walmart releases its fiscal 2025 earnings, but it may take years for the stock to regain its status as a viable income stock [15]. - Given the stretched valuation, investors seeking passive income may find better opportunities in other high-yield dividend stocks with more favorable valuations [16][17].

Retail Sector Performance - The retail sector concluded 2024 with robust consumer spending, as December retail sales rose 0.4%, building on November's upwardly revised 0.8% gain, reaching a total of $729.2 billion [2] - Categories such as miscellaneous stores, sporting goods and hobby stores, and furniture and home furnishings outlets showed standout performance [2] - Consumers defied challenges due to a resilient labor market and steady wage growth, with retailers capitalizing on promotional strategies to drive spending on big-ticket items and essentials [3] Retail Sales Breakdown - Motor vehicle & parts dealers saw a 0.7% month-on-month increase in sales [4] - Furniture & home furnishing stores and electronics & appliance outlets experienced sales increases of 2.3% and 0.4%, respectively [4] - Food & beverage stores and clothing & clothing accessories stores witnessed sales growth of 0.8% and 1.5%, respectively [4] - Sporting goods, hobbies, musical instruments & bookstores saw a 2.6% rise in sales, while gasoline stations reported a 1.5% increase [5] - Non-store retailers (primarily online) reported a 0.2% jump, and general merchandise stores experienced a 0.3% increase [5] - Miscellaneous stores registered growth of 4.3%, while building material, garden equipment & supplies dealers saw a 2% decline [5] - Health & personal care stores and food services & drinking places saw sales declines of 0.2% and 0.3%, respectively [5] Abercrombie & Fitch (ANF) - Abercrombie & Fitch excels in integrating digital and physical retail channels, driving higher customer satisfaction and loyalty [6] - The company revised its Q4 net sales outlook upward to a range of 7% to 8%, up from the prior forecast of 5% to 7%, due to a successful holiday sales season [7] - The company has a trailing four-quarter earnings surprise of 14.8% on average, with Zacks Consensus Estimate suggesting 15.1% sales growth and 69.3% EPS growth for the current financial year [8][9] Amazon (AMZN) - Amazon's robust e-commerce platform and efficient delivery services continue to drive revenue growth, with Prime membership fostering customer loyalty and recurring revenues [10] - The Zacks Consensus Estimate suggests 10.9% sales growth and 82.4% EPS growth for the current financial year, with a trailing four-quarter earnings surprise of 25.9% on average [11] Costco (COST) - Costco's success is driven by strategic investments, a customer-centric approach, and a strong emphasis on memberships, with high renewal rates and efficient supply chain management [12] - The Zacks Consensus Estimate suggests 7.2% sales growth and 11.8% EPS growth for the current financial year, with a trailing four-quarter earnings surprise of 2% on average [13] Walmart (WMT) - Walmart is strengthening its market presence through strategic e-commerce initiatives, including acquisitions, partnerships, and improvements in delivery and payment systems [14] - The Zacks Consensus Estimate suggests 4.8% sales growth and 11.3% EPS growth for the current financial year, with a trailing four-quarter earnings surprise of 9.3% on average [15]

Core Insights - The ongoing Q4 earnings season shows a strong performance with total earnings for 48 S&P 500 members up by +21.3% year-over-year and revenues up by +6.8% [4][5] - Walmart, Marvell Technology, and Amphenol Corp. are highlighted as key stocks in the current market analysis [2][9][12] Group 1: Earnings Performance - Total earnings for 48 S&P 500 members are up +21.3% from the same period last year, with 83.3% beating EPS estimates and 70.8% beating revenue estimates [4][5] - For the entire Q4, S&P 500 earnings are expected to increase by +8.6% on +4.8% higher revenues [5][6] - Full-year 2025 S&P 500 earnings are projected to rise by +13.7% on +5.4% higher revenues, marking the first time since 2018 that all 16 Zacks sectors are expected to see positive earnings growth [6][7] Group 2: Walmart Inc. - Walmart shares have outperformed the Zacks Retail - Supermarkets industry over the past year, gaining +74% compared to +68.4% for the industry [9] - The company benefits from a diverse business model and a strong omnichannel strategy, which has increased traffic across physical and digital platforms [9][10] - Despite raising its fiscal 2025 guidance, Walmart faces challenges from adverse currency movements and margin pressures, indicating a potential slowdown in Q4 revenue and operating income [11] Group 3: Marvell Technology, Inc. - Marvell Technology shares have outperformed the Zacks Electronics - Semiconductors industry, with a +93.3% increase compared to +58.5% for the industry [12] - The company reported a 98% year-over-year increase in data center end market revenues, driven by AI demand for PAM products and ZR electro-optics [13] - However, weakening consumer spending and high inflation may negatively impact sales in the Consumer segment [14] Group 4: Amphenol Corp. - Amphenol shares have gained +4% over the past six months, slightly underperforming the Zacks Electronics - Connectors industry, which gained +5.2% [15] - The company is well-positioned due to strong demand for its high-technology interconnect products, particularly in defense and commercial markets [15][16] - Amphenol expects a mid-teens increase in sales from the Defense market for 2024, supported by its diversified business model [16][17]

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Walmart's DEI Policy Changes - Walmart scaled back its diversity, equity, and inclusion (DEI) programs, joining other companies like Harley-Davidson, John Deere, and Tractor Supply [1][5] - The decision was celebrated by conservatives but faced pushback from shareholders and Democratic officials [1][2] - Over 30 Walmart shareholders, representing more than $266 billion in combined assets, expressed concerns about the business impact of abandoning DEI initiatives [3][4] - Shareholders accused Walmart of giving in to pressure from anti-DEI groups and ignoring risks associated with racial inequity [4] - A group of 13 Democratic state attorneys general also criticized Walmart's decision, urging the company to reconsider and protect civil rights in the workplace [5][6] Shareholder and Investor Reactions - Some investors praised Walmart's move, while others urged the company to recommit to DEI strategies that reduce bias and create inclusive workplaces [2][5] - Shareholders requested a meeting with Walmart's leadership to discuss the reversal and its implications [5] - The attorneys general warned that Walmart's decision could alienate customers and employees, negatively impacting the company's bottom line [7] Walmart's Response and Future Plans - Walmart defended its decision, stating it remains committed to creating a sense of belonging for all associates and customers [8] - The company announced it would stop funding the Center for Racial Equity and discontinue the use of terms like "LatinX" and "DEI" in official communications [9] - Walmart will no longer participate in the Human Rights Campaign Corporate Equality Index, which rates companies on LGBTQ employee policies [9] - Walmart U S CEO John Furner emphasized the company's ongoing journey to ensure inclusivity and belonging for all customers and associates [9]

Core Viewpoint - The Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo for allegedly offering preferential pricing to Walmart, which the FTC claims has led to higher consumer prices and disadvantaged other retailers [1][2]. Group 1: Allegations and Legal Context - The lawsuit alleges that PepsiCo violated the Robinson-Patman Act, a law that has seen limited enforcement in recent decades [2]. - The FTC's action aims to ensure fair competition among all retailers, regardless of size, according to outgoing FTC Chair Lina Khan [2]. Group 2: Company Response - PepsiCo has strongly disputed the FTC's allegations and criticized the manner in which the lawsuit was filed [1][3]. - The company emphasizes its position against the claims made by the FTC [3]. Group 3: Political Context - The lawsuit has seen opposition from the FTC's two Republican commissioners, who voted against the case [4].

Walmart and Symbotic Partnership - Walmart deepens partnership with Symbotic to enhance supply chain and delivery efficiency through the acquisition of Walmart's Advanced Systems and Robotics business [1] - Symbotic will integrate its AI-powered robotics platform into Walmart's operations to automate online pickup and delivery processes at 400 stores initially, with potential for further expansion [2] - The deal includes a $200 million cash payment at closing and up to $350 million in contingent consideration based on APD system orders, with Walmart funding a $520 million development program [3] - The collaboration could add over $5 billion to Symbotic's backlog and expand its addressable market, while Walmart aims to optimize e-commerce operations and enhance customer value through automation [4] Walmart's E-Commerce Strategy - Walmart leverages technology to meet growing customer demand for seamless online shopping and efficient local fulfillment, with 90% of the U.S. population living within 10 miles of a Walmart store [7] - Store-fulfilled deliveries surged nearly 50% year-over-year for the quarter ended Oct 31, 2024, as Walmart uses its stores to fulfill e-commerce orders, reducing costs and increasing delivery speed [7] - Walmart's global e-commerce sales rose 27% in Q3 fiscal 2025, driven by store-fulfilled pickup and delivery and marketplace growth [8] - The company has invested in data analytics, digital presence expansion, and in-store operations optimization, alongside initiatives like buyouts, alliances, and improved delivery and payment systems [8] Walmart's Stock Performance - Walmart's shares rallied 12.3% in the past three months, outperforming the industry's growth of 11.8% [9] Other Retail Industry Highlights - Costco Wholesale (COST) carries a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 2% on average and consensus estimates suggesting 7.2% sales growth and 11.8% earnings growth for the current financial year [10] - The TJX Companies (TJX) carries a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 4% on average and consensus estimates indicating 3.7% sales growth and 11.2% earnings growth for the current financial year [11]

About this content About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup ...