Connected media – Related media
On Thursday, Walmart updated its annual projections upward following a nearly 5% increase in quarterly revenue, fueled by heightened activity across its physical stores and online platform, along with better-than-expected sales in non-grocery categories.
The retail giant exceeded Wall Street’s predictions for both revenue and earnings, leading to a 6% increase in its stock price during morning trading sessions.
Walmart now anticipates a 3.75% to 4.75% increase in annual sales, with adjusted earnings per share between $2.35 and $2.43. This outlook adjustment marks a shift from earlier projections, which estimated sales growth at 3% to 4% and earnings per share ranging from $2.23 to $2.37.
Despite this optimistic revision, Walmart’s forecast for the latter half of the year remains conservative, possibly not meeting Wall Street’s more robust expectations. The retailer predicts third-quarter adjusted earnings between 51 and 52 cents per share, slightly below the analysts’ forecast of 54 cents. For the full year, analysts had anticipated earnings at the upper end of Walmart’s range, around $2.43 per share.
In a CNBC interview, Walmart’s CFO, John David Rainey, attributed the positive outlook to strong performance in the initial half of the year. He expressed a cautious stance for the latter half, citing potential impacts from the 2024 election, unrest in the Middle East, and other global factors on consumer sentiment.
Rainey emphasized that there hadn’t been noticeable shifts in consumer behavior, with consistent sales performance throughout the quarter and a solid start to the back-to-school season.
“Our customers continue to prioritize essentials, showing selectiveness and a penchant for value, which has remained stable without further deterioration,” Rainey remarked.
A notable positive trend for Walmart was the uptick in sales of consumer staples like lawn and garden products, marking the first rise in 11 quarters, albeit modest.
Financial figures for Walmart’s fiscal second quarter surpassed analyst expectations from an LSEG survey:
- Adjusted Earnings Per Share: 67 cents, versus the expected 65 cents
- Revenue: $169.34 billion, compared to the anticipated $168.63 billion
Walmart posted a net income of $4.5 billion, or 56 cents per share, for the quarter ending July 31, down from $7.89 billion, or 97 cents per share, year-over-year.
Revenue escalated from $161.63 billion reported in the same quarter the previous year. Walmart US saw a 4.2% increase in comparable sales, excluding fuel, surpassing analyst forecasts. Sam’s Club experienced a 5.2% rise in similar metrics, aligning with expectations.
E-commerce sales globally saw a 21% increase, with a 22% rise in the United States. U.S. customers frequented Walmart’s stores and website more than in the previous year, with transaction counts up by 3.6% and average spending per visit rising by 0.6%.
Walmart’s performance offers a broader view into American household spending trends and economic expectations, especially significant as inflation concerns have recently driven more affluent consumers to seek value at its locations.
Inflation rates have moderated, aligning with historic averages, as per the latest U.S. Department of Labor data. Amidst the political discourse on handling rising living costs, Walmart has continued its push for lower retail prices.
Rainey highlighted the company’s strategy of offering temporary price reductions, with significant increases in such promotions, especially in food items. Despite ongoing high prices compared to pre-pandemic levels, Walmart remains committed to providing cost-effective alternatives, particularly as the gap between dining out and home cooking costs widens.
As of Wednesday’s close, Walmart shares stood at $68.66, marking a significant year-to-date rise of nearly 31%, which notably outperforms the S&P 500’s gains.
Connected media – Linked media
