The largest retailer in the United States (WMT.US) beat Wall Street expectations in both earnings per share and revenue in Q1. Although retail sales (real) in US is declining y/y, the company's stores are still popular against competitors - primarily due to competitive advantages (prices). Weaker consumers choose retailers that offer cheaper products and goods - which is what WalMart specializes in. The company raised its full-year forecast but pointed out that the consumer clearly weakened at the end of the quarter.
Revenues: $152.3 billion vs. $148.72 billion forecast ($141.57 billion in Q4 2022)
Earnings per share (EPS): $1.47 vs. $1.31 forecasts
Total U.S. sales (excluding fuel) 7.4% y/y vs. 5.08% forecasts
- Despite the strong performance, the company lowered its Q2 earnings per share forecast slightly - from $1.63 to $1.68 (it had estimated $1.7. However, it estimated a higher - than earlier - full-year earnings per share of $6.1 to $6.2 per share;
- The company pointed out that the consumer is surprisingly resilient but remains cautious - customers are less likely to spend money on 'discretionary' goods and are more likely to expect promotions. This is especially true when it comes to sales of higher-priced products like electronic equipment. Higher sales of groceries offset the slowdown in the electronics and apparel segments. E-commerce sales also rose 27% year-on-year.
- Management indicated that the results clearly show that Americans' financial health is still better than it was before the pandemic. However, CFO Rainey reported that customer spending weakened as the quarter progressed with the largest decline after February. He attributed this in part to the end of the fiscal pandemic-related financing program (Supplemental Nutrition Assistance Program) and lower tax refunds this year.
WalMart (WMT.US) shares, D1 interval. Despite the widely reported recessionary outlook in the U.S. economy by analysts, the company's shares are doing well and have erased last year's losses. At the time, the company was struggling with still high stocks. The opening points to the vicinity of $152 per share which could bring the bulls closer to the peaks of the fall of 2022. Source: xStation5
