Investors have been pushing Walmart's (NYSE:WMT) stock higher this year on expectations of a persistent growth lift. The world's biggest retailer seems to have a good balance between its online business and its brick-and-mortar platform. That flexible offering has allowed it to capture more than its fair share of the industry rebound since COVID-19-related closures struck global markets in March.

That positive investing thesis will be put to the test when Walmart announces its fiscal third-quarter results in a few days while offering its most detailed outlook yet for the key holiday shopping season ahead.

With that big picture in mind, let's look at the trends to watch when management reveals Q3 operating trends on Tuesday, Nov. 17.

A woman wearing a mask and holding a shopping bag.

Image source: Getty Images.

More growth on tap

Walmart's last two earnings reports contained head-turning growth numbers. U.S. comparable sales soared 9.3% in the second quarter in only a modest slowdown from the prior quarter's 10% spike.

That Q3 surge came from soaring customer spending, with average transaction sizes jumping 27%. Most of the gains were tied to Walmart's e-commerce segment, too, which accounted for more than 6 full percentage points of last quarter's sales spike. Through the first six months of the year, Walmart has added 7%, or $18 billion, of revenue to its global base, as shoppers enthusiastically engaged with its multi-channel selling platform.

Investors are expecting more modest results for the Q3 period, in part because of the lack of additional federal stimulus support. Net sales should still rise by about 3%, according to Wall Street projections. Watch for a better balance between customer traffic and average transaction size. But Walmart is still likely to see reduced shopper visits coupled with bigger orders.

Costs and cash

The chain notched a rare increase in gross profit margin last quarter and it will be interesting to see whether that was the start of a new trend. It's possible the boost was just a temporary impact of stimulus payments that allowed Walmart to keep prices higher while selling a greater proportion of discretionary purchases like home furnishings and consumer electronics.

WMT Gross Profit Margin Chart

WMT Gross Profit Margin data by YCharts

As for the short-term future, CEO Doug McMillon and his team took a cautious outlook approach in late August by declining to issue a detailed sales forecast. Executives also decided to spend excess cash on debt retirement rather than stock buybacks or splashy acquisitions.

An additional three months of sales data might convince the retailer to reinstate a fiscal 2021 outlook this week, especially since executives already have a few weeks of fourth-quarter demand trends to rely on.

As it stands now, most investors who follow the stock are looking for sales to rise by about 5% this fiscal year, with major pressures involving elevated unemployment and recessions in the U.S. and Europe. But that prediction might change if the retailer says spending trends are holding up, especially online, heading into the peak holiday shopping season.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.