Walmart, the retail giant known for its low prices, has surpassed expectations with its second-quarter earnings report. The company posted adjusted earnings of $1.84 per share, up 4% from the previous year and well above the Wall Street consensus forecast. Group revenues also exceeded estimates, increasing by 5.8% to $161.63 billion. Walmart’s success can be attributed to its ability to attract value-focused shoppers who are cutting back on discretionary spending. The company’s U.S. same-store sales were up 6.4%, surpassing the forecasted 4.5%. CEO Doug McMillon attributes this success to customers prioritizing value and convenience, as well as the growth of online sales, which saw a 24% increase globally. With these strong results, Walmart has raised its full-year profit forecast and expects earnings per share to be between $6.36 and $6.46. Walmart shares rose 1.7% in pre-market trading following the earnings release. Additionally, the company announced a major executive change, promoting Kathryn McLay to CEO of its international business effective September 11. McLay previously ran Walmart’s Sam’s Club division.
Walmart, the retail giant, reported stronger-than-expected earnings for the second quarter and raised its full-year profit forecast. The company’s lower-priced products attracted value-focused shoppers amidst a decline in discretionary spending. Walmart’s adjusted earnings for the quarter came in at $1.84 per share, up 4% from the same period last year, beating the Wall Street consensus forecast of $1.70 per share. Revenues were up 5.8% to $161.63 billion, surpassing analysts’ estimates. U.S. same-store sales rose 6.4%, well ahead of the forecasted 4.5%. Walmart’s operating income improved 6.7% to $500 million, with gross margins rising 50 basis points.
Walmart’s CEO, Doug McMillon, stated that the company had another strong quarter, attributing it to customers prioritizing value and convenience. He highlighted the growth in eCommerce, which increased by 24% globally. McMillon also mentioned that food sales remained strong, but he was encouraged by the results in general merchandise compared to initial expectations. Walmart’s associates played a crucial role in increasing transaction counts and units sold, leading to profit growth outpacing sales growth. McMillon expressed confidence in Walmart’s inventory position and anticipated a positive performance in the second half of the year.
Following the earnings release, Walmart shares rose 1.7% in pre-market trading, indicating an opening bell price of $162.00 each. Additionally, Walmart announced a significant executive change, promoting Kathryn McLay to CEO of its international business. McLay, who previously ran Walmart’s Sam’s Club division, will assume her new role on September 11.
Overall, Walmart’s strong second-quarter earnings and improved profit forecast demonstrate its ability to attract value-focused shoppers and adapt to changing consumer preferences. The company’s focus on convenience, eCommerce growth, and strong performance in general merchandise have positioned it well for the remainder of the year.
Takeaways:
- Walmart exceeded expectations with its second-quarter earnings, driven by value-focused shoppers and lower-priced products.
- The company reported adjusted earnings of $1.84 per share, up 4% from the previous year, and revenues of $161.63 billion, up 5.8%.
- Walmart’s U.S. same-store sales rose 6.4%, surpassing the forecasted 4.5%.
- CEO Doug McMillon highlighted the growth in eCommerce and general merchandise sales, as well as the contribution of associates to increased transaction counts and units sold.
- Walmart raised its full-year profit forecast and announced the promotion of Kathryn McLay to CEO of its international business.
