Wal-Mart earnings: What investors don't want to hear

Following Wall Street's early peek into Wal-Mart's bah humbug holiday quarter, shareholders are left waiting on new CEO Doug McMillon to offer guidance as to where the company is headed.

While few analysts expect any dramatic announcements in the discounter's earnings release on Thursday, many are hoping McMillon, who assumed the CEO role earlier this month, has a strategy to soon ignite sales growth.

"I think investors need to hear something new," said MKM Partners' Patrick McKeever. "McMillon can't just come out and talk about the great international opportunity or the small-format opportunity."

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Some have questioned whether Wal-Mart's strategy of marketing the lowest prices is enough to offset the external issues plaguing the discounter's lower-income shopper.

(Read more: Cold weather could mean hot sales for these brands)

In its earnings pre-announcement late last month, when the retailer warned its fourth-quarter profit would be "at or slightly below the low end" of its previous guidance range of $1.60 to $1.70 per share, it said cold weather and a reduction in food stamp benefits were among headwinds.

But Telsey Advisory Group's Joe Feldman said his sense is that most investors understand there has been a slowdown in demand from the low- to middle-income consumer, but the economic pressures will pass in time.

To fight back, Feldman said Wal-Mart needs to keep the pressure on with regard to pricing, sending a clear message to the consumer that it is the best and least expensive place to shop.

"If Wal-Mart could demonstrate that sales were better in areas of the U.S. that had 'normal' weather, and/or show that customers are adjusting to life with less SNAP benefits, that would help," Feldman said. "If the consumer is spending less or has less to spend, Wal-Mart needs to be aggressive in convincing them to shop at its stores."

(Read more: Don't put too much stock in retail earnings)

MKM's McKeever said Wal-Mart has a better cushion than most against weather drags, given its exposure to the grocery business. Although the retailer has done well in food, he said, "The SNAP cuts are going to be tough for them to trump so to speak, so I'm viewing that as a meaningful comp headwind through the third quarter of this year."

Credit Suisse: Wal-Mart should acquire Family Dollar
Credit Suisse: Wal-Mart should acquire Family Dollar

Despite these challenges, Wal-Mart has repeatedly touted its small-format stores as a potential springboard for success—a move that analysts have said is critical in the changing retail environment.

In October, the discounter announced plans to add up to 150 more small stores in 2014. While Wal-Mart has traditionally grown its domestic footprint organically, Credit Suisse analyst Michael Exstein issued a report Wednesday suggesting the world's largest retailer should accelerate its small-format store growth by buying Family Dollar.

(Read more: Time to close Wal-Mart stores? Analysts think so)

Nearly a quarter of Family Dollar stores are in large urban markets, where Wal-Mart has historically had a hard time breaking ground, according to the note. The firm's research also showed Family Dollar locations have the least overlap with Wal-Mart compared with other dollar stores, which would mean a lower risk of a deal being blocked by regulators.

"Wal-Mart has signaled a need to fill the small-format hole in its store portfolio to compete for its core customer in the 'fill-in' trip," Exstein wrote.

Financially, Wal-Mart could buy Family Dollar (Exstein suggested paying a 30 percent premium, or just under $9.5 billion for the company), but MKM's McKeever said some investors want to hear about a slowing of square footage growth, so the retailer can return more cash to shareholders.

(Read more: Wal-Mart adds to gloom, guides 4Q earnings lower)

Despite this noise, Janney Capital Markets' David Strasser said he doesn't believe investors will hear anything dramatic from McMillon on Thursday. Though Strasser acknowledged a confluence of macroeconomic issues are straining the big box retailer's core shopper, he said he's not overly concerned about its near-term future.

"Wal-Mart is going to continue to lead on price, and aren't going to let anybody take that mantle from them," he said. "This is a big ship to turn."

—By CNBC's Courtney Reagan. Follow her on Twitter @CourtReagan.