Important events
Aug 182023
WMT: Walmart Stock Falls 2.2% Despite Revenue Beat at $161bn and Raised Guidance
The world’s biggest retailer expects to keep growing in the face of higher rates, trusting that the mighty US consumer will keep coming back.- Walmart stock (ticker: WMT) fell 2.2% on Thursday after the company reported upbeat second-quarter results. Something wasn’t right and investors weren’t convinced that the world’s largest retailer can pull off continued growth in this economy. Walmart, however, raised its guidance.
- The retailer picked up $161.6bn in revenue, up 5.7%,, eclipsing the first-quarter figure of $152.3bn. Analysts were expecting $160.2bn. The result put earnings per share at $1.84, topping estimates for $1.71. What’s more, Walmart raised its full-year guidance to $6.36 to $6.46 per share, from a previous per-share earnings estimate of $6.10.
- CEO Doug McMillon said he expects Walmart to grow the top line “if things get tougher” thanks to the company’s position as a budget-friendly mainstay in the consumer spending sector. Walmart’s stock is up just over 8% since the start of the year, with shares trading just under their record high of $161 achieved last week.
TaurusEmerald / Wikimedia Commons
May 192023
WMT: Walmart Posts $152.3bn in Earnings, Boosts Sales Growth Outlook
The largest US retail chain lifted its full-year guidance but disappointed Wall Street for the current quarter.- Walmart reported first-quarter earnings figures that pleasantly surprised investors in a tough retail environment. The gigantic retailer picked up adjusted earnings of $1.47 a share on revenue of $152.3bn. Analysts were eyeballing adjusted profit of $1.32 a share on revenue of $148.9bn.
- The uplifting performance prompted Walmart to raise its financial forecast for fiscal 2024. More precisely, the company projected adjusted earnings to land between $6.10 and $6.20 a share, topping analysts’ estimates of $6.14 a pop. Revenue forecast for the year was bumped to 3.5%, up from 2.5% to 3%.
- One line of disappointment was Walmart’s current-quarter guidance. The biggest US retailer expects earnings of between $1.63 and $1.68 a share. Analysts, on the other hand, were hoping to see earnings of at least $1.71. Walmart stock (ticker: WMT) finished Thursday’s session with a modest gain.
Mike Mozart / Flickr
Mar 102023
WMT: Amazon’s Online Shopping Market Share Threatened by Walmart+
- Walmart+ is eating into Amazon Prime’s market share amongst wealthy US households.
- Amazon Prime however remains firmly in the stronger position by US subscriptions.
- Surveys suggest that Walmart+ is likely to see growth in subscribers this year.
Amazon Prime may still reign supreme in online shopping subscriptions, but it may now have some competitors catching up with it. Amazon itself has also had its fair share of challenges over the past year – announcing mass layoffs with its share price down by almost 34% YoY. And with subscriptions to Walmart gaining traction, it could end up adding to Amazon’s woes.
Where’s Walmart+ excelling?
A cheaper alternative to a similar set of benefits as Amazon Prime, Walmart+ seems to be thriving amongst the wealthy supermarket shopper demographic. Since last year, the number of US households with over $150k total income subscribed to Walmart+ has increased by 12%, and the service has also become the most popular amongst users under the age of 34. It’s a pretty significant sign of growth when it’s considered that the service was released less than 3 years ago. That being said, Amazon Prime is still firmly in the strongest position – with 77% of high-earning households subscribed as of last month.
What’s next?
Some believe that Walmart+ is likely to continue to be a problem for Amazon in the upcoming year. Surveys show that millions of people are likely to subscribe to the service over 2023. Amazon Prime however, is a tough competitor to go up against – with 168m US members compared to Walmart+’s 18.5m. If Prime wants to ensure its dominance, it might have to offer more to subscribers – or consider a price reduction.
Mike Mozart / Flickr
Nov 282022
A Black Friday breakthrough
Amazon’s crown as the Black Friday king is looking wobbly, with Walmart claiming the glory this year.- It seems that Amazon is no longer the go-to retailer for Black Friday shoppers, as new data shows web searches for discounts at Walmart to have surged by more than 386% YoY. Amazon on the other hand only ranked fourth by discount searches despite ranking first last year, coming in behind Target and department store Kohl’s.
- The increased popularity might be to do with Walmart making its deals more appealing to shoppers, after having to slash its holiday season outlook this month due to inflation-conscious consumers being more careful with their spending. In fact, the National Retail Federation expects holiday sales to increase by up to 8% this year compared to last – which is a decline when inflation is factored in.
- There was also a glimmer of holiday hope on Friday which might indicate that this holiday season might not be as bleak as retailers feared. Online sales actually beat predictions this year by rising 2.9% YoY on Thanksgiving. That being said, online sales in November and December are only predicted to grow by 2.5% compared to last year’s growth of 8.6%, so it might be a little early to get excited.
Tamanna Rumee/ Unsplash
Nov 162022
A mixed shopping cart
Walmart had good news and bad news to report in Q3, though the good was enough to buoy the entire retail sector.- Walmart healthily beat estimates on both ends in the third quarter, reporting EPS of $1.50 on revenues that jumped by nearly 9% to come in at $152.81bn, though the brand also posted a net loss of $1.8bn, down from a profit of $3.11bn a year earlier.
- The giant benefited from penny-pinching consumers, who as it turns out are still very much shopping but doing so in the cheapest way possible – which works rather well for Walmart. Another encouraging factor was its inventory glut, which seems to be declining and putting less pressure on margins.
- The stock lifted 6.5% on Tuesday to hit its highest level since mid-May, when its Q1 report sent prices plummeting. Walmart is often viewed as a bellwether for the retail industry and as a gauge for consumer health, and its positive report sent rivals like Target sharply into the green as well. Let’s see how the rest of the week’s earnings play out.
Fabio Bracht / Unsplash
Sep 232022
Spooky season or selling season?
What do you get when you mix surplus inventory with record-high inflation? A very difficult holiday season for retailers.- Walmart's gearing up for a tricky holiday season by hiring just 40k holiday workers. Target’s also getting ready for lower-than-usual profits hiring just 100k workers, with both the retail giants bringing forward holiday deals in the calendar in hopes of getting consumers in the spending spirit.
- Those hiring numbers might sound high, but they’re lower than usual. Last holiday season, Walmart hired 150k workers while Target has hired as many as 130k in previous years. Analysts reckon that retailers might need to pull out all the stops this year as record-inflation looks poised to make it tricky for them to sell their inflated inventories.
- Their stock prices aren't in the merriest of moods either. Walmart has managed to get away with just a 1% drop in premarket trading today, but Target’s down near 4%, with close to a 7% drop this week. We can probs chalk that up to the wider market sinking yesterday on the news of further rate hikes.
Caique Morais / Unsplash
Aug 172022
Underpromise, overdeliver
Big Retail helps the broader market tick higher on Tuesday with reassuring earnings reports, despite doomsday warnings a couple weeks back that freaked err’body out.- Walmart gained 5.11% on Tuesday to mark its best day of the year and take prices to a three-month high, making a solid attempt at erasing its recent profit warning declines. The retail giant topped estimates on both ends in Q2 with EPS of $1.77 on sales that grew 8% to come in at $152.86bn, tho profits were definitely tighter this quarter.
- Inflation-pinched shoppers are indeed buying less of the fun stuff (which also happens to be the high margin stuff) as they save their cash for necessities, but as it turns out inflation has also lured more middle and higher income consumers who are now looking to taper their spending and helped Walmart sell off left over inventory. However, the brand still reiterated its previously slashed FY outlook.
- Another retail leader shone in the earnings spotlight yday, with Home Depot popping 4% to a five-month high after an earnings beat proved the housing market is still strong. Both reports helped ease recession fears even while proving inflationary pressures persist, and other retailers like Target were buoyed by hope as well and saw gains on Tuesday.
Caique Morais / Unsplash
Jul 262022
Walmart wipes out retailers
Earnings szn is in full swing this week, and retailers are already feeling the burn of inflationary cautions and cost cuts, thanks to Walmart’s latest update.- Walmart gave investors a glimpse into the future on Monday, and let’s just say it’s looking a lot darker than hoped. The retail giant slashed its profit expectations for the second quarter, saying that inflation is forcing consumers to spend more money on basics like food than on fun stuff like electronics and “other discretionary categories”.
- The dip in sales is leading retailers to aggressively mark down items that people aren’t buying, and has left more stock on shelves and in warehouses, putting pressure on margins. Walmart now expects EPS for Q2 and the FY to decline up to 9% and 13% respectively, previously expecting flat growth for both.
- Analysts think this signals a "proverbial train wreck" for other retailers – and price action on Monday seemed to agree. Walmart fell 10% in extended trading on Monday, taking down rivals like Target, Amazon and Macy’s too. It’s not great news but it’s also not a huge surprise considering all are struggling with inventory and Target trimmed its profit forecast twice in a few weeks.
Caique Morais / Unsplash
May 182022
Shoppers return their investment
Walmart investors are skipping the queue and heading home after the balance sheet gets dragged down (like many others) by macroeconomic headwinds.- Shares slumped over 11% on Tuesday to mark its biggest one-day decline since 1987, taking prices to their lowest levels since March last year. Ouch. It came after a mixed Q1 report that missed on the bottom end with EPS of $1.30 on revenues that were up a meager 2% at $141.57bn, as well as net income that was down 25% YoY.
- The EPS weakness was down to rising costs, which are hurting consumers and producers alike. After the pandemic boosted demand for home goods, retailers are now struggling to keep up with previous profits amid soaring food prices, fuel costs, a labor shortage, and sky high inflation – groceries were its hardest hit segment.
- Walmart is a bellwether for how consumers are handling inflation, and these earnings aren’t a great sign. The company seems confident the rest of the year will be better, despite forecasting a FY sales decline of 1%. However, that will only happen if it manages to keep its prices low enough to attract budget-strapped customers without forfeiting profits.
Alexandru Tugui / Unsplash
Apr 142022
John Rainey finds a new Pal
Walmart is shaking up its exec team and it's looking for a fresh take – which apparently PayPal’s CFO can give them.- Walmart has poached PayPal’s CFO John Rainey to fill the boots of longtime CFO Brett Biggs, who announced in November that he would step down from the retail giant.
- Walmart CEO Doug McMillon reckons Rainey could be the man to bring a fresh but safe pair of hands to the company. Rainey will be overseeing Walmart’s efforts to expand its third-party marketplace and ramp up its advertising business.
- PayPal was down 2.8% on Wednesday at a one-month low, while Walmart was up 2.6% to flirt with an ATH. Nothing beats rubbing it in, does it? So: PayPal no longer has a chief financial officer, which sounds worse than it probably is. We’re sure that vacancy will be filled soon.
Walmart
Feb 182022
Walmart adds to its cart
Investors fill their shopping bags with Walmart stock after seeing the retailer push through supply chain constraints to conquer the holiday season.Key points:
- Shares popped 5% on Thursday after the retail giant exceeded expectations with EPS of $1.53 on revenues of $152.9bn, buoyed by an inflation-defying boom in holiday sales.
- As a discount store, inflation works in their favor according to CFO Brett Biggs. While some big brands have been hiking their prices to keep up with inflation, Walmart has kept its prices steady and has been focusing on other ways to make money (like advertising and deliveries) that won’t chase away consumers – and it’s clearly working.
- It’s expecting FY2023 sales to rise 3% despite ongoing shipping backlogs and supply chain jams. Even considering all that, the retailer saw its inventory jump 28% in Q4, and expects that number to increase this quarter.
Fabio Bracht / Unsplash
Jan 182022
Walmart waltzes into crypto
Walmart updates its shopping cart to include a range of hot new NFT products.- The stock popped 1.6% in Friday morning trading to touch its highest price since November before sinking down to end the day.
- It quietly trademarked a bunch of virtual goods, hinting that it’s waltzing into the Metaverse in 2022 with a line of NFTs and even potentially its own cryptocurrency. It’s apparently even considering letting customers pay in crypto…
- It’s the latest in a long list of big retailers to get in on the Metaverse hype – Gap (GPS) and Nike (NKE) have both recently launched their own NFT products.
Richard Horvath / Unsplash
Nov 172021
Investors look for a discount code
Investors are putting Walmart back on the shelves after Q3 earnings fail to meet shopping standards.- Walmart sank over 3% on Tuesday for its worst intraday drop since May despite seemingly impressive earnings.
- It beat on both the top and bottom lines, with revenue up 4% to $140bn.
- Consumer prices were up 6.2% in Q3 – the highest level of inflation in 30 years – sending people hunting for bargains at discount stores like Walmart and Target (TGT).
- Investors reacted to a decline in gross margins, which are down 42 basis points after a quarter of too-low product prices and supply chain shortages.
- Walmart has put its Santa hat on and is ready for the Christmas rush, with 11.5% more inventory and an extra 200,000 pair of hands to help out.
- It raised its annual sales and profit forecast for the third consecutive quarter, and analysts are bullish on the future of both Walmart and the consumer market in general.
Illustration by TradingView