Walmart (WMT) has reported stronger-than-anticipated profits and sales, showcasing resilience amidst a challenging consumer landscape that has affected other retailers. On Thursday, the retail giant posted adjusted earnings per share of $0.62, surpassing Wall Street’s forecast of $0.60, as detailed by Bloomberg data. The company’s revenue climbed 6% year-over-year to $179.5 billion, exceeding the expected $177.6 billion.
The performance of Walmart’s U.S. stores further impressed analysts, as same-store sales rose by 4.5%, outperforming the 4% forecast. There was also a reported 1.8% increase in foot traffic and a 2.7% rise in the average transaction value in U.S. locations.
In a positive move for investors, Walmart raised its fiscal year guidance, now projecting net sales growth between 4.8% and 5.1%, up from the previous estimate of 3.75% to 4.75%. Expected adjusted earnings for the fiscal year were also revised upwards to between $2.58 and $2.63, compared to earlier expectations of $2.52 to $2.62. Although Walmart’s wholesale division, Sam’s Club, witnessed a 3.8% growth, it fell short of the 4.8% anticipated by Wall Street. On the digital front, Walmart’s global eCommerce sales surged 27% in the latest quarter.
The company anticipates that capital expenditures for the year will account for 3.5% of its net sales, which represents the top end of previous estimates.
Despite the upbeat news, Walmart’s stock saw an initial dip of around 2% post-announcement. In his final quarterly report as CEO, Doug McMillon emphasized the company’s gains in market share, enhanced delivery speeds, and effective inventory management. With the announcement of his early retirement, McMillon expressed confidence in his successor, John Furner, the current president of Walmart U.S.
During the latest quarter, grocery sales in the U.S. experienced low-single digit growth, fueled by strategy adjustments that included price rollbacks and improved delivery services, which contributed to volume growth. Notably, groceries, which comprise approximately 60% of overall sales, remain a cornerstone of Walmart’s business.
Walmart also noted a low-single digit increase in health and wellness sales driven by pharmacy script counts and a boost in digital merchandising, attributed to strong sales in categories such as fashion, home, and auto care, with private label brands gaining popularity among consumers.
In a strategic shift, Walmart announced plans to move its stock listing to the Nasdaq, while maintaining its ticker symbol, WMT.
This positive outlook reflects Walmart’s adaptability in a fluctuating market, reinforcing its status as a leader in the retail sector.