Q3 2024 Earnings Preview

Welcome to this week’s earnings review newsletter, where we delve into the latest quarterly performances of leading companies shaping the retail, technology, and financial sectors. This edition highlights Walmart, Lowe’s, NVIDIA, Target, and Intuit, offering insights into how these giants are navigating dynamic market conditions and leveraging innovation for growth.

In retail, Walmart and Target showcase contrasting dynamics, with Walmart thriving on essential goods and omnichannel capabilities, while Target adapts to challenges in discretionary spending. Lowe’s continues to focus on its Pro customer growth, even as macroeconomic pressures weigh on DIY demand.

The technology and financial sectors bring their own stories of transformation. NVIDIA leads with groundbreaking AI and data center innovations, driving record-breaking results, while Intuit continues to strengthen its foothold in financial technology through AI-powered solutions and customer-centric strategies.

This newsletter provides an in-depth analysis of each company’s performance, outlook, and the strategic moves shaping their future. Let’s explore how these industry leaders are navigating the current economic landscape to deliver value to traders and stakeholders alike.

Walmart Inc. (WMT)

Category: Retail & E-Commerce

Walmart reported a strong Q2 2024, showcasing resilience in its omnichannel retail strategy. The company achieved total revenue of $169.3 billion, a 4.8% year-over-year increase, driven by solid growth in both physical and digital sales. Global eCommerce revenue surged by 21%, supported by robust store-fulfilled pickup, delivery, and marketplace growth. Walmart U.S. delivered comparable sales growth of 4.2%, with notable strength across grocery, consumables, and general merchandise. Operating income increased by 8.5% to $7.9 billion, reflecting improved gross margins and a 26% growth in its global advertising business, Walmart Connect.

Internationally, Walmart’s performance remained strong, with net sales growing 7.1% year-over-year (8.3% in constant currency). Key drivers included food and consumables, improved general merchandise sales, and an 18% growth in eCommerce. Sam’s Club saw significant growth in membership income (+14.4%) and comparable sales (+5.2% excluding fuel), supported by higher transactions and eCommerce penetration.

Key Points:

• Total Revenue: $169.3 billion, up 4.8% YoY.

• Global eCommerce Revenue: +21% YoY.

• Operating Income: $7.9 billion, up 8.5%.

• EPS (GAAP): $0.56; Adjusted EPS: $0.67.

• Guidance Update: Raised FY25 outlook with expected net sales growth of 3.75%-4.75% and adjusted operating income growth of 6.5%-8.0%.

Projections for Q3 2024: Walmart has provided updated guidance for the upcoming quarter:

• Net Sales Growth: Expected to increase by 3.25%-4.25% in constant currency.

• Operating Income Growth: Projected to grow by 3.0%-4.5%.

• Adjusted EPS: Anticipated to range between $0.51 and $0.52.

• Key Drivers: Continued strength in eCommerce (+21% in Q2 2024), growing advertising revenues (+26% YoY), and steady performance in membership income at Sam’s Club (+14.4%).

Walmart’s investments in omnichannel capabilities and its focus on maintaining strong grocery and consumable sales position the company for consistent growth. Analysts will be closely watching its ability to sustain these trends amid evolving consumer behavior.

Lowe's Companies Inc. (LOW)

Category: Retail & Home Improvement

Lowe's Q2 2024 performance reflects challenges in the home improvement market, primarily driven by macroeconomic pressures and declining consumer discretionary spending. The company reported total sales of $23.6 billion, down 5.5% year-over-year, and a comparable sales decline of 5.1%. Diluted earnings per share (EPS) were $4.17, compared to $4.56 in the prior-year quarter, with adjusted diluted EPS at $4.10 after excluding a one-time gain from the 2022 sale of the Canadian retail business.

Key drivers of the sales decline include unfavorable weather conditions affecting outdoor and seasonal product categories and reduced DIY customer demand. Despite these challenges, Lowe’s saw mid-single-digit growth in its Pro customer segment and online sales, reflecting the strength of its Total Home strategy and omnichannel capabilities.

Key Points:

• Total Sales: $23.6 billion, down 5.5% YoY.

• Comparable Sales: -5.1%.

• Pro Segment Sales: Mid-single-digit positive growth.

• Operating Income: $3.4 billion, representing a margin of 14.6%.

• Adjusted EPS: $4.10.

• FY 2024 Guidance Update:

o Total sales revised to $82.7-$83.2 billion (previously $84-$85 billion).

o Comparable sales expected to decline 3.5%-4.0%.

o Adjusted diluted EPS guidance lowered to $11.70-$11.90 (from $12.00-$12.30)

Projections for Q3 2024:

• Net Sales: Lowe’s anticipates continued macroeconomic pressures affecting DIY demand and seasonal categories. Analysts expect Q3 sales to remain in line with the revised FY guidance range.

• Operating Income Margin: Expected to remain stable at 12.4%-12.5%, supported by disciplined expense management and productivity initiatives.

• Comparable Sales: Likely to remain under pressure, with a focus on Pro customer growth and digital adoption as key offsets.

Lowe’s strategic investments in technology, Pro services, and inventory optimization continue to position the company for long-term growth, despite near-term headwinds. Analysts will closely watch the Q3 results to assess Lowe’s resilience in a challenging retail environment.

NVIDIA Corporation (NVDA)

Category: Technology & Semiconductors

NVIDIA continued its momentum in Q2 Fiscal 2025 with record-breaking results. The company achieved revenue of $30.0 billion, marking a 15% increase sequentially and a staggering 122% year-over-year growth. The data center segment was the primary driver, contributing $26.3 billion, reflecting a 16% sequential increase and 154% growth YoY. NVIDIA’s advancements in generative AI, particularly with its Blackwell architecture and Hopper GPUs, have positioned it as a leader in the accelerating AI and data center revolution.

Earnings per diluted share (GAAP) rose to $0.67, up 168% YoY, while non-GAAP EPS reached $0.68, reflecting a 152% increase YoY. Gross margins remained strong at 75.1% (GAAP), despite a slight sequential decline due to higher operating expenses linked to research and development initiatives.

Key Points:

• Total Revenue: $30.0 billion, up 122% YoY and 15% QoQ.

• Data Center Revenue: $26.3 billion, up 154% YoY.

• Operating Income: $18.6 billion, up 174% YoY.

• GAAP EPS: $0.67; Non-GAAP EPS: $0.68.

• Shareholder Returns: $15.4 billion returned in the first half of FY25 through share repurchases and dividends.

Projections for Q3 Fiscal 2025:

• Revenue Guidance: NVIDIA expects Q3 revenue to reach $32.5 billion (+/- 2%), reflecting continued demand for its AI and data center solutions.

• Gross Margins: Projected at 74.4%-75.0% (GAAP and Non-GAAP).

• Operating Expenses: GAAP and Non-GAAP operating expenses anticipated at $4.3 billion and $3.0 billion, respectively.

• Drivers: Ongoing deployment of generative AI solutions, robust adoption of NVIDIA’s Spectrum-X Ethernet networking, and continued growth in gaming and professional visualization segments.

NVIDIA’s focus on AI infrastructure, coupled with innovations like NVIDIA NIM™ microservices and partnerships for AI enterprise applications, underscores its leadership in the evolving tech landscape. The company’s strong positioning in high-growth sectors like data centers and AI-enabled platforms sets the stage for sustained growth.

Target Corporation (TGT)

Category: Retail

Target faced challenges in Q2 2024, with total revenue declining 4.9% year-over-year to $24.8 billion. The drop was driven by a 5.4% decline in comparable sales, reflecting softer demand in discretionary categories like apparel, electronics, and home goods. Traffic declined by 4.3%, while the average transaction value dipped by 1.1%. Despite these pressures, Target saw mid-single-digit growth in essential categories such as food & beverage, beauty, and household essentials, highlighting the resilience of its core business.

Operating income increased by 40.4% to $1.2 billion, supported by gross margin improvements to 27.0%, up from 21.5% in Q2 2023. This was achieved through lower markdown activity, better inventory management, and favorable category mix shifts. Net earnings for the quarter were $835 million, translating to $1.80 per diluted share, compared to $183 million ($0.39 per share) in the prior-year quarter.

Key Points:

• Total Revenue: $24.8 billion, down 4.9% YoY.

• Comparable Sales: Declined 5.4%.

• Operating Income: $1.2 billion, up 40.4% YoY.

• Gross Margin: 27.0%, up from 21.5% YoY.

• Net Earnings: $835 million, or $1.80 per diluted share.

Projections for Q3 2024:

• Revenue Guidance: Target anticipates a low-to-mid single-digit decline in comparable sales, with discretionary categories remaining under pressure.

• Operating Margin: Expected to stabilize at approximately 6.0%, driven by disciplined cost management and supply chain efficiencies.

• Earnings per Share: Target maintains its full-year EPS guidance of $7.00-$8.00.

• Drivers: Continued growth in essential categories and enhancements to omnichannel capabilities, including same-day delivery and drive-up services.

Target’s strategy of focusing on essentials and operational efficiency positions it for steady performance amid macroeconomic headwinds. Analysts will watch Q3 results to assess how well the company balances these challenges with profitability goals.

Intuit Inc. (INTU)

Category: Financial Technology

Intuit closed its fiscal Q4 2024 with strong results, reporting revenue of $3.0 billion, a 12% year-over-year increase. The growth was driven by double-digit gains in its Small Business and Self-Employed Group, which posted revenue of $1.9 billion, up 17% YoY, and a 9% revenue increase in its Consumer Group, reflecting sustained adoption of TurboTax Live and enhanced customer retention. The Credit Karma segment saw a decline in revenue, attributed to continued softness in personal loan originations and lower credit card activity, reflecting macroeconomic pressures.

Operating income for the quarter rose to $1.15 billion, representing a margin of 38.3%, up from 34.9% in the prior year. GAAP diluted earnings per share (EPS) increased to $1.88, a 16% YoY rise. Intuit also returned $600 million to shareholders through stock repurchases, underlining its commitment to shareholder value.

Key Points:

• Total Revenue: $3.0 billion, up 12% YoY.

• Small Business & Self-Employed Revenue: $1.9 billion, up 17% YoY.

• Consumer Group Revenue: Up 9% YoY.

• Operating Margin: 38.3%, up from 34.9% YoY.

• EPS: $1.88, up 16% YoY.

Projections for Fiscal Q1 2025:

• Revenue Guidance: Intuit expects revenue to grow by 10%-12%, driven by strength in its Small Business and Consumer segments.

• Operating Income Margin: Projected to remain strong at approximately 35%-37%, reflecting continued operational efficiencies.

• Earnings per Share (EPS): Estimated in the range of $2.00 to $2.10.

• Drivers: Intuit’s focus on AI-driven innovations, including advancements in QuickBooks Online, TurboTax Live, and Mailchimp integration, will play a key role in driving customer acquisition and retention.

Intuit’s robust performance underscores its strong positioning in the financial technology space. Analysts will be watching for further progress in Credit Karma’s recovery and the continued success of AI integration across its product ecosystem.

Conclusion

This quarter’s earnings reports underline the adaptability and innovation of industry leaders across retail, technology, and financial sectors. Walmart’s robust growth in essentials and eCommerce, alongside Lowe’s focus on Pro customers and operational efficiency, demonstrates resilience in navigating consumer spending shifts. Target’s strategic emphasis on essentials highlights its adaptability, even as discretionary spending remains subdued.

In technology, NVIDIA continues to set the benchmark for AI-driven growth, showcasing how innovation can propel businesses forward even in uncertain times. Intuit’s success in leveraging AI and enhancing customer-centric platforms underscores the growing importance of technology in transforming financial services.

As these companies look ahead, their ability to maintain momentum amid evolving market conditions will be closely watched. From advancing AI capabilities to streamlining operations and deepening customer engagement, the strategies outlined in this quarter’s earnings provide valuable insights into the forces shaping these industries. Stay tuned as we monitor how these trends unfold in the coming months.