Walmart reports earnings amid surging inflation and supply bottlenecks – Stock Market News
Walmart is set to unveil its third-quarter financial results on Tuesday before the market open. The company has largely benefited after the pandemic onset because it was considered an essential retailer by the regulators, allowing the firm’s stores to remain open while most of its competitors were forced to shut down their shops. Nevertheless, to keep up with the competition and further boost its revenue, the enterprise also improved its delivery subscription service, Walmart+. Although the retail giant is estimated to have a substantially high penetration rate of 11.1% in the US households due to its e-commerce business, its financial figures are anticipated to come out soft.
Can rising costs affect Walmart?
Since the global economic reopening, retailers have faced many challenges . Firstly, there is a long-lasting supply and demand imbalance as consumer demand remains high, while a covid-19 outbreak in a manufacturing facility can cease production for several days, severely damaging supply. This asymmetry results in increasing costs for both customers and corporations. Moreover, the ongoing supply chain disruptions such as the shortage of lorry drivers and port congestion have further elevated the firm’s expenses, alongside surging energy prices.To offset these issues, the retail behemoth has taken a wide range of measures. Walmart announced that it will soon build a fully automated fulfillment center and an automated grocery distribution center, which will significantly reduce the supply bottlenecks. Furthermore, the firm is one of the first to have acquired drones and autonomous vehicles to assist in last-mile deliveries. Finally, the firm weighs on its strong brand and customer loyalty to pass on part of the rising costs to consumers and maintain decent margins, while keeping prices lower than most rivals.![](https://www.xm.com/wp-content/uploads/2021/11/Walmart-Stock.png)
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Levels to watch
Taking a technical look at Walmart, the stock has been moving in a sideways pattern in 2021, fluctuating near record highs. The earnings announcement could provide a clear direction to the price, as a strong report could propel the price higher where initial resistance could be met at the $150.3 barrier. If the price continues its ascent, then the next target for the bulls might be the 10-month high of $152.5.On the flipside, should the earnings disappoint, immediate support may be found near the 50-day moving average region, currently at $144.39. If the selling pressure intensifies and the price dips lower, the $138 level might prove a strong obstacle for the bears.![](https://www.xm.com/wp-content/uploads/2021/11/WMT-TA.png)
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