Wal-Mart stock is rising with higher earnings and revenue estimates

The stock rose 1.6% in pre-market trading.

This is breaking news. Read a preview of Walmart’s earnings below and check back for more analysis soon.

Walmart sells the groceries everyone needs. But just because food is a must-have, does that mean the discount giant has a foot on its competitors who sell, say, clothes and lamps?

That’s the question the company will answer when it reports earnings before the opening bell on Thursday.

Analysts are looking for Walmart (Stock ticker: WMT) to earn $1.32 a share in its fiscal first quarter, ahead of guiding the company from $1.25 to $1.30 and its prior annual result of $1.30. Consensus estimates put revenue at $148.94 billion.

Retail earnings season is off to a muted start. Target (TGT) posted earnings that were better than expected, though the large company sounded a cautious note with its guidance. Non-price retailer TJX Cos (TJX) also provided a pessimistic forecast for the second quarter. Both stocks zigzag on their results.

Target and TJX focus more on discretionary products like clothing, a category that has taken a hit because inflation forces shoppers to spend more on essentials like food. Even Home Depot (HD) noted weakness in discretionary sales when it reported results on Tuesday.

Walmart, by contrast, excels at selling essentials, which is why it has earned its reputation as a more defensive retailer.

However, the company has not been immune to changing spending patterns. For example, it was discontinued last year when shoppers quickly stopped buying discretionary products such as clothing and household goods. The shift forced the management to lower the steering sharply.

And Wal-Mart sounded the alarm again in February. The company provided weak forecasts, which overshadowed its strong numbers, warning that shoppers are feeling the pinch.

Now, Wal-Mart’s outlook will likely be fundamental to the stock again.

Expectations may be lower given Target’s results, but investors will be keen to get information on how Walmart’s core low-income shoppers fare.

If customers look as though they’re still laser-focused on cutting expenses substantially, investors may not be happy.

Or the stock could gain if there are signs that Wal-Mart benefits from more shoppers trading down and returning to the discretionary aisles.

Write to Teresa Rivas at [email protected]