Walmart & 3 More Retailers Set to Beat Earnings Estimates This Season

The Retail-Wholesale sector is poised for a strong earnings season, with Q2 2025 top-line growth projected at 5.6% and bottom-line growth at 12.6% year-over-year, influenced by consumer shifts towards essentials, effective cost management, and omnichannel strategies. Amidst this positive sector outlook, Zacks research highlights Walmart (WMT), Abercrombie & Fitch (ANF), Urban Outfitters (URBN), and Burlington Stores (BURL) as companies with a high probability of exceeding earnings estimates, based on their positive Earnings ESPs and favorable Zacks Ranks, offering potential investment opportunities.

Analysis

The Retail-Wholesale sector is positioned for an accelerated growth phase in the second quarter of 2025, with consensus forecasts projecting a 5.6% year-over-year increase in revenue and a 12.6% rise in earnings, outpacing the prior quarter's growth. This outlook is shaped by a bifurcated consumer environment where spending on essentials and value-oriented products remains robust amid inflationary pressures, while discretionary categories face headwinds. Key success factors for retailers this season include strategic pricing, omnichannel integration, and efficient inventory management to protect margins. Against this backdrop, four companies are identified as having a high probability of exceeding earnings estimates based on positive Earnings ESP and favorable Zacks Ranks. Walmart (WMT) is expected to leverage its scale and high-margin digital initiatives to deliver a 9% YoY increase in EPS. Urban Outfitters (URBN) demonstrates the strongest growth profile, with a projected 16.1% YoY EPS increase driven by its brand portfolio and the scaling of its Nuuly rental platform. Burlington Stores (BURL) is set to capitalize on the value-seeking consumer with its off-price model, forecasting a 5.8% EPS rise. Conversely, while Abercrombie & Fitch (ANF) is also flagged for a potential earnings beat, its consensus EPS estimate of $2.27 marks a 9.2% decline from the year-ago period, indicating a potential softening in its performance despite its operational agility.

Key Decisions for Investors

• Given the strong sector-wide earnings growth forecast of 12.6%, investors could consider increasing exposure to retailers demonstrating effective cost controls and robust omnichannel capabilities.
• For growth-oriented positions, Urban Outfitters warrants attention due to its high projected EPS growth of 16.1% and success with its Nuuly platform, while Walmart offers a more stable investment thesis based on its defensive market position and 9% expected earnings growth.
• Despite a positive signal for an earnings beat at Abercrombie & Fitch, investors should exercise caution due to the projected 9.2% year-over-year decline in EPS, and closely monitor management's forward guidance for signs of margin pressure or demand shifts.
• Traders focused on short-term catalysts may find opportunities in the four highlighted stocks, particularly Burlington with the highest Earnings ESP of +6.06%, suggesting strong potential for a positive surprise driven by its off-price business model.