Walmart’s Stock Performance
In early trading, Walmart’s stock surged by 7.3% to $64.22 per share, pushing its valuation to over 25 times the expected earnings, a significant increase from its 10-year average valuation of about 20 times earnings.
First-Quarter Results
Walmart raised its full-year sales and profit forecast following a strong first-quarter performance driven by robust sales of groceries, clothing, electronics, and other non-essential items.
Sales Growth and Record High
The company’s total US comparable sales, excluding fuel, rose by 3.9%, surpassing analyst expectations. This growth was supported by increased online and in-store traffic, with customers making more purchases per visit.
Revenue and Profit Forecast
Walmart’s first-quarter adjusted earnings exceeded forecasts, reaching 60 cents per share, with total revenue surpassing expectations at $161.51 billion. The company now projects annual consolidated net sales to grow at the higher end of its previous estimate, with adjusted profit per share also expected to be above previous forecasts.
Market Share and Online Sales
Walmart’s online sales in the US surged by 22%, outperforming the holiday season growth. The company’s pickup and delivery services, along with its third-party marketplace, contributed to this increase. Notably, households with incomes over $100,000 drove this online sales growth.
Consumer Trends and Analyst Insights
Analysts noted that Walmart’s strong results may pose challenges for other retailers, indicating a gain in market share. The company observed a shift towards budget-conscious shopping behavior, particularly among lower-income consumers, who are opting for cheaper options amid inflationary pressures.
Outlook and Future Projections
Walmart remains optimistic about categories like apparel, jewellery, home goods, automotive items, and consumer electronics, expecting continued growth. The company anticipates sustained inflation levels for its product range and aims for growth in both sales and profit for the upcoming year.
