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Walmart Q1 Earnings Likely Boosted By Inflation

The latest consumer price index (CPI) released last week indicates inflation remained sky-high in April. And while rising prices were a headwind for most companies in the first three months of 2022, they likely served as a tailwind for mega-retailer Walmart (WMT, $147.48).

Wall Street will find out this week, with WMT an early entrant on the earnings calendar; WMT will report its first-quarter results ahead of the May 17 open. 

The consumer staples stock has shown resilience amid the recent market volatility, up roughly 2% for the year-to-date compared to a more than 17% decline for the broader S&P 500.  

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WMT beat on both the top and bottom lines in its fourth quarter thanks in part to its ability to keep prices competitive in a high-inflation environment. And this trend probably continued in Q1, despite a challenging backdrop, says UBS Global Research analyst Michael Lasser (Buy).

“With low prices as its core value proposition, WMT is uniquely positioned to benefit from rising inflation,” the analyst adds. “Its scale helps give it the ability to keep healthy price gaps versus its peers, which can help it achieve further share gains in the grocery channel.  

While Lasser admits there will likely be some “moving pieces” in the report – including unpredictability related to macro headwinds – components such as U.S. same-store sales and full-year guidance will be good.

“We view WMT’s shares as compelling as they offer more certainty than others in this uncertain backdrop,” the analyst says.

Amid tough year-over-year (YoY) comparisons that include last year’s stimulus-related pop, consensus estimates are for Walmart to report a 12.4% drop in earnings to $1.48 per share. Revenue is expected to arrive at $138.8 billion (+0.4% YoY).

Lowe’s Faces Tough Comps in Q1

First-quarter earnings from Lowe’s (LOW, $191.70) are due out before Wednesday’s open. Similar to Walmart, the home improvement retailer is facing hard comparisons from Q1 2021. 

As such, analysts, on average, are calling for a slim 0.9% YoY rise in earnings to $3.24 per share. And revenue is projected to be flat at $23.8 billion.

Still, Lowe’s entered 2022 with momentum following a solid fourth-quarter print, says UBS Global Research analyst Michael Lasser (Buy). 

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Additionally, the consumer discretionary name raised its full-year guidance in February. This reflects an inflation tailwind due to LOW’s “prudent pricing power” that will likely last for at least a few more quarters, the analyst adds. 

“We believe LOW is building a track record of solid execution with every passing quarter,” Lasser says. “Plus, it has several unique drivers to propel its results in the next few years independent of the market growth.”

Kohl’s Top and Bottom Lines Probably Contracted in Q1

Kohl’s (KSS, $47.51) will report its first-quarter earnings ahead of the May 19 open. 

The department store chain ended 2021 with record adjusted earnings of $7.33 per share and year-over-year revenue growth of 21.8% to $19.4 billion.

And Deutsche Bank analyst Gabriella Carbone (Buy) thinks the company is just getting started. “KSS has laid the groundwork for growth along with improving profitability, and is a more nimble company today than it was pre-pandemic,” Carbone says.

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Included in the company’s plans to drive growth are goals for Kohl’s to reach $2 billion in sales from its partnership with beauty company Sephora and expand its operating margin to a range of 7% to 8%.

Carbone adds that these goals “may prove to be prudent as management has greatly considered a number of headwinds,” including supply-chain woes and a tight labor market.

As for the retail stock’s first-quarter results, analysts, on average, expect earnings to arrive at 72 cents per share (-31.4% YoY) and revenue to land at $3.7 billion (-0.5% YoY).

In addition to the company’s financial results, Wall Street will be looking for additional updates on the company’s strategic initiatives. Last Wednesday, shareholders voted on Kohl’s new slate of directors, rejecting an attempt from Macellum Advisors to add its nominees to the board. The activist investor has been pushing KSS to make changes, including unloading some of its real estate and putting itself up for sale.

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Who doesn’t love a relaxing dip in the swimming pool on a sweltering, hot day? And when that swimming pool is in your backyard, it’s even better. You could bring your friends together over the summer by hosting pool parties. You could teach your kids to swim right at home. If you rent out your […]

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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The post 5 Places To Work Remotely That Aren’t In Your Apartment appeared first on The Rent.com Blog : A Renter’s Guide for Tips & Advice.

Should You Consider a Roth Conversion While the Market is Down?

While a down market may not be a fun time for investors, there are some bright spots and opportunities to be had. Stock market drops like we’ve seen recently might make a Roth IRA conversion more appealing as a strategy for investors.

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Should you consider converting a traditional IRA to a Roth during a down market? There are a few things to consider before pulling the trigger.

What is a Roth Conversion?

Before you embark on a Roth conversion, you need to fully understand what it is. When you have a traditional IRA, those are pre-tax dollars that you’re investing. While the money grows tax-free, when you later go to take a withdrawal, every dollar you pull will be taxed.

With a Roth IRA you are investing post-tax dollars, and when you convert a traditional IRA to a Roth, you pay the full tax during the year that you convert, at ordinary income rates. Then, the dollars that you’ve converted will grow tax-free for the remainder of the time that they sit within the investment. When you later take money out of a Roth, it’s all tax-free, as long as you are 59½ or older and follow a few other rules.

What You Need to Know About a Roth Conversion in a Down Market

When you trigger a Roth conversion, you’ll be responsible for paying the tax due on any pre-tax contributions or earnings within the traditional IRA. The benefit here is that if the market has dropped, it’s likely that your IRA value has dropped along with it – so your full value has gone down, and you’ll be paying taxes on the current value (which is lower, due to the market being down than it was months ago). So, in theory, you can convert a larger portion of your IRA in a down market and pay less in taxes than you could in years when the market is up.

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Here’s an example: If you had a traditional IRA with $100,000 at the start of the year, and due to the market, it is now down to $85,000, you could choose to convert that entire IRA to a Roth and only pay tax on the $85,000 instead of the $100,000 that it was months ago. Assuming that these dollars will rebound in the market in the future, you’ve picked a good opportunity to convert.

It’s important to work with both a financial adviser and your tax professional to determine not only the amount of tax you’ll owe during the year that you perform the Roth conversion, but also how long it would potentially take you to break even.

What are the Pros of a Roth Conversion?

Converting from a traditional IRA to a Roth has many potential benefits for investors. Because a Roth IRA allows for dollars to grow tax-free, all the growth is also tax-free. There are also no RMDs, or required minimum distributions, on a Roth IRA once you turn 72. With a traditional IRA or 401(k), you have a set minimum you must withdraw each year once you hit RMD age, but Roth IRAs do not adhere to this rule.

Tax rates are still relatively low, historically, which means now is as good of a time as any for a Roth conversion, from a tax perspective. Tax parity is another benefit of Roth IRAs because you have different “buckets” of income to pull from at retirement in an effort to keep your taxes low during retirement. Roth IRAs also benefit your spouse and heirs at inheritance time, as the tax-free benefits pass along to them in various ways, depending on the time limit and amount, and their relationship with you, the deceased.

A Few Cautions on Conversions

Roth IRA conversions aren’t all benefits though, there are a few things to be aware of. There’s the five-year rule, where you must wait five years after a conversion before making a withdrawal or else you could incur a 10% penalty. Keep in mind that this five-year rule only applies to those who are younger than 59½. After you reach that age, the five-year rule and its penalties no longer apply.

Triggering a Roth conversion may also increase your adjusted gross income (AGI), which could compound other issues, such as Medicare premiums. This may also increase your tax rate.

The best way to determine if a Roth conversion is the right move for you during the down market is to work with a financial adviser and a tax professional so you can get feedback on your specific financial situation.

Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified, LLC should not be a substitute for consulting a qualified tax adviser, accountant, or other professional concerning the application of tax law or an individual tax situation.
Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax adviser for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
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The post 3 Instances When a Landlord Can Legally Break a Rental Lease appeared first on The Rent.com Blog : A Renter’s Guide for Tips & Advice.

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The post Camping This Summer? Here’s What Gear Is Worth It appeared first on MintLife Blog.

How Much is an iPod Worth?

Apple announced that it’s discontinuing the iPod, so is now a good time to sell your old iPod? Apple introduced the first iPod in 2001, revolutionizing the way we listen to music, and Apple products can surprisingly hold their value. From Apple’s vintage original to the final 7th generation iPod Touch, here’s how much your […]

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.