Walmart Q1 2023 Results Sees Retail Giant Beat Expectations on Earnings & Revenue despite Prudent Consumer Spending
Walmart “expanded leverage expenses and operating margin” in the first quarter of 2023 and now expects a 3.5% increase in consolidated net sales for the year.
Wal-Mart Inc. (NYSE: WMT) has raised guidance for the full year 2023 after its success. First quarter earnings report. On Thursday, the multinational retailer reported better-than-expected revenue, which was boosted by its grocery and online business.
In the first quarter of the year, Wal-Mart reported revenue of $152.30 billion, compared to the $148.76 billion that analysts expected. In addition, the Arkansas-based retail giant reported adjusted earnings per share of $1.47 versus an expected $1.32.
Walmart’s sales in the first quarter of 2023 grew 8% as the large grocery business offset disappointing apparel and electronic sales. Groceries accounted for nearly 60% of annual sales in the US, with revenue and operating income growing by 7.6% and 17.3%, respectively.
The company’s stock rose in pre-market trading amid upward guidance reflecting positive earnings.
Wal-Mart expects a 3.5% increase in consolidated net sales for the fiscal year. In addition, the retailer expects adjusted earnings per share for the full year of between $6.10 and $6.20, which is also expected by analysts.
Walmart’s CEO expresses satisfaction with the first quarter of 2023
Walmart President and CEO Doug McMillon spoke about the company’s latest outing in glowing terms, saying:
“We had a strong quarter. Comp sales were strong globally, with e-commerce up 26%. We raised expenses, expanded operating margin, and increased pre-sales earnings. And a big thanks to our partners, who continue to step up and place orders for customers and members when and how they want them to be. They are being served.”
Meanwhile, Wal-Mart’s chief financial officer, John David Rainey, has drawn attention to sustainable consumer spending despite its prudent spending habits. According to Rainey, consumers bought smaller packages and spent less on discretionary items while dealing with promotions to purchase more expensive items. However, despite these pressures, the elasticity of consumer spending remained unaffected. In a media session with CNBC, Rennie said:
“I think (the reason behind flexible consumer spending habits) is probably because balance sheets are much stronger than they were pre-pandemic, even at this point.”
Popular US retail chains such as Home Depot (NYSE: HD) and Target (NYSE: TGT) have previously reported more judicious consumer spending habits.
Wal-Mart shares closed Wednesday at $149.53, with a market capitalization of $403.33 billion.
Fourth quarter 2022
Walmart Results for the fourth quarter 2022, released in February, also reflects significant revenue for the retail giant amid the holiday period. For the fourth quarter of 2022, the largest retail chain in the United States reported revenue of $164.0 billion, and net international sales of $27.6 billion. However, at the time, Wal-Mart said $900 million in currency valuation negatively impacted its international net sales numbers.
The retailer boosted consumer spending at the height of inflation by positioning itself as the go-to for cheap bargains.
McMillon called Walmart’s results for the fourth quarter of 2022 a great way to end 2022. At the time, the CEO said the fourth quarter built on the momentum gained in the previous quarter and positioned Walmart in prime position for 2023.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When he’s not deep into cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.
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