Walmart boosts outlook after a strong first quarter and rising online sales

Shoppers walk to a Walmart in Vernon Hills, Ill., Tuesday, March 28, 2023. (AP Photo/Nam Y. Huh)
Shoppers walk to a Walmart in Vernon Hills, Ill., Tuesday, March 28, 2023. (AP Photo/Nam Y. Huh)

NEW YORK — Walmart reported a strong first quarter and boosted its outlook for the year as the nation's largest retailer continues to draw budget conscious consumers in a challenging economic environment.

Shares rose 1.5% in premarket trading Thursday.

Walmart's financial performance hints at a U.S. consumer that has remained resilient in the face of stubbornly high inflation and tightening credit, though evidence of a pullback in spending has begun to emerge for a number of retailers, particularly for non-essential goods.

Home Depot, the nation’s largest home improvement retailer, said Tuesday that sales for the first quarter fell 4.2%, and it expects its first annual revenue decline since 2009.

On Wednesday, Target reported another quarterly profit decline and issued a cautious sales and profit outlook. The Minneapolis company is dealing with rising costs, which includes rising theft as a big factor.

And despite modesty stronger spending last month, recent government data revealed how Americans are barely keeping up with inflation.

Many Americans are trading down to private label brands, those produced by retailers like Walmart, to save money. That shift, which began in March 2022, accelerated more during the fourth quarter, Walmart executives said in February. Walmart emphasized on Thursday that shoppers remain cautious about spending.

Walmart reported net income of $1.67 billion, or 62 cents per share for the three month period ended April 30. Earnings, adjusted for non-recurring costs, came to $1.47 per share, far exceeding the per-share earnings of $1.32 that Wall Street was looking for, according to a survey by FactSet.

That compares with $2.05 billion, or 74 cents per share, in the year ago period.

Sales rose 7.6% to $152.3 billion, also topping estimates.

Comparable store sales — those from established stores and online operating over the past 12 months -- at Walmart's namesake division rose 7.4%, a bit slower than the 8.3% during the fourth quarter but still solid. It posted an 8.2% gain in the fiscal third quarter.

Online global sales rose 26% in the first quarter, an acceleration from the 17% in the previous quarter.

The company said that it expects that consolidated net sales will be up 3.5%, higher than the previous guidance of 2.5% to 3%. The retailer also projects that per share results for the year will be $6.10 to $6.20, up from the previous range of $5.90 to $6.05.

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