Walmart Inc. (WMT), the nation’s largest retailer, posted its latest quarter results on Thursday, and as CWEB had predicted, the giant retailer continued to grow in strength. Our analysts consider the stock a strong buy. Walmart stocks popped by almost 7 percent after the discounter beat Wall Street analysts’ estimates in both earnings and revenue in the quarter ending April 30.
Walmart’s US business reported a 22 percent increase in e-commerce growth. High-income shoppers are flocking to Walmart because the giant retailer offers value for the buck and quality items. This attracts Americans from all economic strata to shop at the discounter’s stores and online.
According to a survey by LSEG analysts, Walmart was expected to report 52 cents adjusted earnings per share. Instead, the company reported a much higher EPS adjusted of 60 cents. Walmart also topped revenue, posting $161.51 billion, while the consensus of LSEG analysts was $159.50 billion.
Walmart CEO Doug McMillon spoke on an earnings call about the company’s focus on expanding its online business and attracting customers to buy items other than groceries.
Walmart’s grocery business remains its highest earner, with almost 60 percent of sales, but it has the lowest margins. So, the Bentonville, Arkansas-based giant retailer focuses on merchandise such as clothes, makeup, and more, which offer higher margins.
Walmart is also expanding its footprint by focusing on non-retail businesses, including advertising and its subscription model, Walmart Plus. The latter has grown by 24 percent in its fiscal first quarter, with the US segment growing by 26 percent.
As of Thursday midday, Walmart stock had risen by roughly 14 percent to date. It had also crossed the S&P 500 gains of roughly 11 percent in the same period. The giant retailer says it will hit the high end or see a small increase in its previous full-year guidance.
According to its earlier guidance, Walmart expected net sales growth between 3 percent and 4 percent and adjusted earnings per share between $2.23 and $2.37 for the year. CWEB analysts reiterate a Strong Buy for Walmart stock and a price target of $150.
Key Information to Consider Prior to Walmart’s Earnings Report. CWEB Analyst upgrades the stock.
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