Walmart Exceeds Q1 Expectations and Raises Fiscal Year Outlook
Walmart, the world's largest retailer, has posted first-quarter adjusted earnings and revenue that exceeded Wall Street expectations, raising its outlook for the fiscal year. This is in contrast to other retailers that have reported results this week, particularly those that don't focus as heavily on essentials. Walmart's solid performance was driven by rising prices that drew more shoppers to the discount retailer, and strong gains in its budding advertising business. The company reported a 7.4% increase in same-store sales for Walmart U.S., excluding fuel, and a 27% jump in e-commerce sales year-over-year.
Walmart has revised its full-year forecast, expecting a 3.5% increase in consolidated net sales, which is higher than the previously projected 2.5% to 3%. Additionally, the EPS range has been adjusted to $6.10 to $6.20, an improvement from the earlier estimate of $5.90 to $6.05. The earnings beat prompted Walmart to update its guidance. According to the statement, there is an expectation that net sales will increase by approximately 3.5% over the fiscal year. Refinitiv reports that the company anticipates adjusted earnings per share to fall within the range of $6.10 to $6.20 for the entire year, which is approximately consistent with market analysts' projections.
Walmart has been gaining from its sturdy comp sales record, which is driven by its constant expansion efforts and splendid e-commerce performance. Walmart has been making various attempts to improve their selection of products. Furthermore, the corporation has prioritized enhancing their stores with cutting-edge in-store and digital advancements through a store renovation initiative. While Target and Home Depot reported weaker figures during their latest quarters, the retailer boasted strong results.
Walmart is increasingly attracting higher-income shoppers as consumers look for relief from inflation. CEO Doug McMillon pointed to the impact of inflation on consumer behavior, adding customers “are coming to us for value.” Walmart is also seeing market share gains in general merchandise. The company's Walmart Connect division, which is devoted to advertising, enjoyed a 40% increase in ad sales in its first quarter. The global advertising industry experienced a growth of more than 30%.
Looking ahead, Walmart sees net sales increasing by approximately 4.0% in the second quarter in constant-currency terms. Consolidated operating income is forecast to decline approximately 2.0% in constant-currency terms. The anticipated Adjusted EPS falls within the bracket of $1.63 to $1.68 per share. Walmart has revised its full-year forecast, expecting a 3.5% increase in consolidated net sales, which is higher than the previously projected 2.5% to 3%. Additionally, the EPS range has been adjusted to $6.10 to $6.20, an improvement from the earlier estimate of $5.90 to $6.05.
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