Mixed Expectations Ahead of Wal-Mart's 1Q Earnings

Analysts and investors have mixed expectations about Wal-Mart's first-quarter earnings results, which the retailer will release Thursday.

Here's the consensus estimate: Earnings up about 6 percent to $1.15 a share, and revenue up 3 percent to $116.4 billion. According to Forbes, most analysts rate the world's largest retailer at a "buy."

Some analysts are worried, though. Brian Sozzi, CEO of research firm Belus Capital Advisors, tells Investors Business Daily about his concerns over "bare shelves in the food section and to a lesser extent in the sporting goods. If that was a widespread problem, he adds, the company may miss its sales estimates."

Bare shelves is a problem others have noticed, including the New York Times, which in April filed this report about poorly stocked shelves and an employee shortage.

Meanwhile, Citigroup analyst Deborah Weinswig has removed Wal-Mart stock from Citi's top picks list. She tells MarketWatch that some retailers were affected by a delay in tax returns and lingering cold weather, which put off sales of warm-weather merchandise and garden supplies.

"We are concerned that soft sales continued into March and April," she said. "We believe the impact of higher payroll taxes became a significant headwind."

But on the upside, Sozzi thinks shoppers received their tax returns in time to spend them with Wal-Mart during the first quarter. He also says lower gas prices will also help make this a "good" period for the retailer.

"The quarter started off slow for discounters," he told IBD. "But as tax refunds hit the mailboxes in the back half of the quarter, it looks like consumers responded and went to the stores and bought for Easter and in advance of Mother's Day."

We'll get the complete picture of Wal-Mart's quarter Thursday morning before the market opens.