Walmart Raises Forecast for Current Fiscal Year

The recent quarterly figures confirm the strength of the retail giant. Analyst Steven Shemesh commented that Walmart had exceeded high expectations, reinforcing his assessment that the stock has further potential for price gains. Christopher Horvers from JPMorgan also emphasized that Walmart had delivered strong overall figures.

Besides the revenue forecast, Walmart has also raised expectations for operating income and adjusted earnings per share. Adjusted operating income is expected to increase by 6.5 to 8.0 percent in the current fiscal year, compared to the previously anticipated 4.0 to 6.0 percent. For adjusted earnings per share, Walmart now plans for a value between $2.35 and $2.43, compared to the previously forecasted $2.23 to $2.37.

In the second fiscal quarter, which ended in late July, Walmart was able to increase its revenue to 169.3 billion USD, representing a 4.8 percent increase compared to the same quarter of the previous year. The adjusted operating income rose by 7.2 percent to 7.9 billion USD. However, the net profit attributable to Walmart shrank by 43 percent to 4.5 billion USD, which is due to a high special income in the prior year. The adjusted earnings per share were slightly above the average analyst estimates at 0.67 USD.

The food retail sector, which accounts for approximately 60 percent of U.S. revenue, remained robust and recorded significant increases in sales, market share, and customer numbers, particularly among wealthier customers. Online sales in the U.S. grew by more than 20 percent, and international revenue increased by 8.3 percent, driven by strong businesses in Mexico, Central America, and China.

Walmart is currently less affected by the negative impacts of economic uncertainty and high interest rates due to its role as a supplier of everyday products. While Americans are cutting back on more expensive expenditures like travel, furniture, and renovations, Walmart benefits from stable sales. However, CFO John David Rainey emphasized the ongoing uncertainty, especially regarding the upcoming U.S. presidential election and geopolitical tensions in the Middle East.