Investors haven't seen great returns from Walmart (WMT 0.27%) stock in recent months. While sales spiked during the pandemic, retailing rivals like Target, Kroger, and Tractor Supply have enjoyed faster growth and bigger earnings upticks since early 2020.

That performance gap will be top of shareholders' minds when Walmart reports Q2 results in just a few days and issues its new outlook for fiscal 2021. So let's examine a few trends to look for in that Aug. 17 announcement.

Person shopping for groceries while wearing a face mask.

Image source: Getty Images.

Sales check-in

Temporary federal stimulus measures helped Walmart grow in the fiscal first quarter despite soaring results from a year earlier. Sales gains decelerated just slightly, falling to 6% compared to 9% for the full 2020 year.

But CEO Doug McMillon said in late May that Walmart's operating momentum was on a firm footing. "Customers want to get out and shop," he stated. Investors will be looking for confirmation of that bullish prediction, with two-year sales gains ideally holding near the 16% rate that the retailer enjoyed last quarter.

Target announces its results a day later, and we'll see if that chain is still gaining market share as shoppers trade up to more premium home furnishings, apparel, and consumer electronics. Tractor Supply set a high bar for the industry in mid-July, with two-year sales up 41%.

Making investments

Wall Street wasn't happy to hear Walmart say it sees a multi-year period of elevated spending ahead, with capital investments likely to hit $14 billion in 2021. That's the right strategy, and the retailer has demonstrated that these spending surges routinely lay the groundwork for better operating results. Yet, investors are still worried about weaker stock buyback spending and sluggish dividend hikes over the next few years.

The capital projects likely put extra pressure on earnings this quarter as Walmart prepped its massive network for this year's holiday shopping season. That's another reason why operating income might look weak compared to peers like Target and Tractor Supply.

Looking ahead

Heading into the report, executives are calling for comparable-store sales to rise in the low single digits this year. The core U.S. segment's earnings might hold roughly flat, in part thanks to surging costs and capital spending.

The global growth and earnings forecasts were upgrades compared to Walmart's initial outlook. Another hike this week might be enough to get investors more interested in this stock, which hasn't participated in the market's rally in 2021.

However, if Wall Street yawns following Walmart's earnings report and keeps looking for more thrilling growth elsewhere, the stock might become more attractive to value stock fans. Sales and earnings are looking strong on a two-year basis, and the dividend is still rising.

Sure, it might take a few quarters before Walmart's ramped-up investment pace starts showing concrete results. But if you wait until then to buy the stock, you might miss out on some market-thumping returns in the meantime.