Walmart beats estimates for sales, raises profit forecast
Walmart Inc raised its full-year earnings forecast on Tuesday and beat estimates for same-store sales as it benefited from additional stimulus checks that put more money in consumers’ pockets and boosted demand for apparel and electronics.
Shares in the world’s biggest retailer were up about 3% in premarket trade.
After a bumper year, bolstered by a big push into e-commerce and delivery, Walmart continued to see soaring demand as increased vaccinations and the easing of restrictions brought more people back to its stores. Visits to Walmart’s stores grew by 21.7% in April, according to data firm Placer.ai.
The Bentonville, Arkansas-based retailer benefited from a wave of stimulus-driven consumer spending, with many qualified households having received additional $1,400 checks as part of a Biden administration package approved in early March.
“Our optimism is higher than it was at the beginning of the year. In the U.S., customers clearly want to get out and shop. We anticipate continued pent-up demand throughout 2021,” Chief Executive Officer Doug McMillon said in a statement.
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Sales at U.S. stores open at least a year rose 6%, excluding fuel, in the first quarter ended April 30. Analysts had estimated growth of 0.86%, according to IBES data from Refinitiv.
Wall Street has been afraid to push Walmart estimates too high because of the uncertain environment. But a strong consumer has been driving retail, said Randy Hare, director of equity research at Walmart investor Huntington Private Bank.
Walmart said it now expects fiscal 2022 earnings to increase by high single digits, while previously the company had forecast a slight decline in profit for the year. Online sales lost some momentum, rising 37%, compared with a surge of 74% in the year-earlier period and 69% in the prior quarter.
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Still, McMillon warned that the second half of the year would have more uncertainty than a typical one.
Operating income rose 32.3% to $6.91 billion in the quarter, while Walmart reported adjusted earnings of $1.69 per share.
Total revenue rose 2.7% to $138.31 billion.
(Reporting by Aishwarya Venugopal in Bengaluru and Richa Naidu in Chicago; Editing by Anil D’Silva and Chizu Nomiyama)
