Walmart upgrades outlook, shares rocket to record
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The news: Walmart lifted annual sales and profit forecasts for the second time this year, sending shares to a record high, amid strong demand for essentials from consumers coping with high inflation.
The numbers: Shares rose as much as 8.4% to a record intraday high of USD74.43 on Thursday after the world’s largest retailer by sales said consumers focused on value were flocking to its stores looking for cheaper goods.
It forecast sales will grow as much as 4.75% in its fiscal 2025 year, up from previous upper guidance of 4%, while adjusted profit per share would be between USD2.35 and USD2.43, compared to the previous forecast range of USD2.23 to USD2.37 per share.
Walmart’s US comparable sales in the three months to 31 July rose 4.2%, beating the LSEG consensus average of 3.3% growth, with strong growth in non-essential items and e-commerce sales.
The retailer's international sales grew 8.3%, led by contributions from Walmex - it’s Mexico and Central America division - and China.
The context: The report shows consumers are coping fine with high prices and the highest borrowing costs in generations, while focusing on essentials and value-for-money purchases.
Walmart said it increased food discounting during the quarter, and invested in its e-commerce platform, advertising and third-party marketplaces.
In contrast, Home Depot earlier this week lowered its sales outlook, as customers seemed reluctant to spend on major home projects amid high interest rates and inflation.
What they said: “We aren’t experiencing a weaker consumer overall,” Walmart CEO Doug McMillon said on a call with analysts. “They want value. They want a broad assortment of items and services.”
The sources: Walmart release , Bloomberg , Reuters
