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

The Retail-Wholesale sector is anticipated to report robust Q2 2025 earnings, with top-line growth projected at 5.6% year-over-year and bottom-line growth at 12.6%, influenced by evolving consumer spending patterns favoring essentials and value, strategic pricing, and omnichannel integration. Amidst this backdrop, four specific retailers—Walmart (WMT), Abercrombie & Fitch (ANF), Urban Outfitters (URBN), and Burlington Stores (BURL)—are highlighted as strong candidates to surpass earnings estimates this season, based on their positive Earnings ESP and favorable Zacks Ranks.

Analysis

The Retail-Wholesale sector is poised for accelerated growth in the second quarter of 2025, with Zacks Earnings Outlook projecting a 5.6% year-over-year increase in revenue and a 12.6% rise in earnings, surpassing the previous quarter's growth of 3.7% and 10.3%, respectively. This anticipated strength is driven by a consumer shift toward essentials and value-oriented products amidst persistent inflation, benefiting retailers with competitive pricing and robust omnichannel strategies. Key differentiators for success this earnings season include strategic pricing power, efficient supply-chain and inventory management, and a seamless integration of digital and physical retail channels. Against this backdrop, four specific companies—Walmart (WMT), Abercrombie & Fitch (ANF), Urban Outfitters (URBN), and Burlington Stores (BURL)—are identified as having a high probability of delivering positive earnings surprises, based on their combination of a positive Earnings ESP and favorable Zacks Ranks. WMT and URBN are notable for their strong projected YoY EPS growth of 9% and 16.1%, respectively. BURL shows the highest potential for a beat with an ESP of +6.06%, leveraging its off-price model. In contrast, ANF, despite a positive ESP of +2.62%, faces a consensus estimate for a 9.2% YoY earnings decline, indicating a potential disconnect that warrants attention.

Key Decisions for Investors

• Consider positions in retailers demonstrating strong omnichannel capabilities and value-oriented offerings, as these are the key drivers of performance in the current consumer environment.
• The four highlighted stocks, WMT, ANF, URBN, and BURL, present potential catalyst-driven opportunities ahead of their earnings reports due to their high probability of beating estimates.
• Focus on Walmart and Urban Outfitters, as their positive earnings surprise potential is coupled with strong underlying year-over-year EPS growth forecasts of 9% and 16.1% respectively.
• Exercise caution with Abercrombie & Fitch; while its Earnings ESP is positive, investors should scrutinize the reasons behind the projected 9.2% year-over-year earnings decline before the earnings release.
• Beyond the headline earnings beat, investors should closely monitor commentary on gross margins, inventory levels, and e-commerce growth to confirm the long-term health and operational efficiency of these retailers.