Walmart overtakes on the top and bottom lines – rising in early trading

Retail giant Walmart

WALMART
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published its financial reports for the first quarter of 2023 according to which its revenues amounted to $152.3 billion, above analysts’ expectations for revenues of $148.65 billion. The company posted an adjusted profit of $1.47 per share, higher than analysts’ expectations on Wall Street for an adjusted profit of $1.32 per share.

Same-store sales in the US increased by 7.4%, much better than the market expectation of a 5.25% increase. This is sensational news – Walmart serves as a mirror for the retail market worldwide.

Operating profit improved by 17.3% to $6.24 billion, with operating profitability increasing by 0.34%, reflecting the company’s shift to focus on profitability. Gross margin decreased by 0.18% to 23.7% due to the increase in sales at lower margin grocery stores.

Looking ahead to the current quarter, which ends in July, Walmart expects adjusted earnings of between $1.63 and $1.68 per share. For the full year, sales are likely to rise 3.5% from 2022 levels, with Walmart forecasting earnings of between $6.1 and $6.2 a share, a 15-cent improvement from the high end of its previous forecast. However, this is a low forecast as analysts expect an adjusted profit of 1.71 for the current quarter. For the entire year, the company’s forecast is in line with analysts’ expectations for an adjusted profit of $6.15 per share.

“We had a strong quarter. Sales were strong globally with a 26% increase in e-commerce. We leveraged expenses, expanded operating margin and increased profit before sales,” CEO Doug McMillan said. “And a big thank you to our associates, who continue to provide customers and friends with quality service.”

Earlier this week, these were Target

TARGET CORP
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and Home Depot

HOME DEPOT
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which also recorded better than expected profits in the first quarter, but were hampered by a rather weak forecast for the near term in light of waning consumer demand. Target said it sees a low-single-digit percentage decline in same-store sales for the current quarter, but maintained its full-year forecast for adjusted earnings of between $7.75 and $7.85 a share. “As we look beyond the second quarter, we continue to believe that we entered this year with the appropriate level of caution, while planning conservatively in light of a difficult macro environment and rapidly changing consumer trends,” said CFO Michael Fidelka.

However, Home Depot cut its profit forecast for fiscal 2024, saying overall profits would fall between 7% and 13% from 2023 levels, compared with its previous forecast of a “mid-single digit” decline, with like-for-like sales falling between 2% and 5% .

Walmart shares have risen by 22% since the beginning of the year (as of before the opening of trading today) to a price of $149.5 and a market value of $403.3 billion.