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Walmart raised its full-year outlook after a forecast-beating quarterly report, as stubborn inflation continues to draw in US consumers seeking to stretch their dollar further.
The upbeat guidance and solid first-quarter results helped push Walmart’s shares more than 6 per cent higher in pre-market trading on Thursday, putting the stock on course for its biggest one-day advance since November 2022 if the gains are held during regular trading.
The world’s largest retailer now expects growth in full-year net sales to be at the high end or slightly above its original guidance of 3 to 4 per cent. Adjusted earnings per share are forecast to be at the high end or slightly higher than its original guidance of $2.23 to $2.37.
The rosy outlook accompanied a 6 per cent increase in first-quarter revenues to $161.5bn, exceeding analysts’ expectations of $159.5bn as consumers flocked to Walmart in search of deals.
Walmart said in its first quarter, however, that like-for-like inflation was “slightly positive”. That suggests that a prediction in November by chief executive Doug McMillon that the company could find itself “managing a period of deflation” in early 2024 has not come to pass, in a probable reflection of stubborn inflation across the broader US economy.
With relief from price increases still limited, Walmart said on Thursday that its “value-convenience proposition is resonating” and that market share gains in its first quarter were “primarily driven by upper-income households”. That continues a trend observed over recent quarters.
Although the number of transactions at the company’s main Walmart US operations increased 3.8 per cent in the three months to April, average ticket remained flat, a reflection that the US consumer is still seeking ways to stretch their dollar.
This is a developing story
