Walmart falls after setting cautious profit guidance; Costco and Target also lower
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Walmart (NYSE:WMT) fell after topping estimates with its holiday quarter earnings report, but setting cautious guidance for the year ahead. Revenue was up 7.3% to $164.1B during the quarter.
The retailer reported total U.S. comparable sales rose 8.3% in Q2 to top the consensus estimate for a 6.2% increase and the guidance mark of +3.0%. Comparable sales in the U.S. were up 13.9% compared to two years ago. Transactions were up 1.8% during the holiday quarter and average ticket rose 6.3%. Comparable sales rose 12.2% at Sam's Club locations in the U.S. off transaction growth of 6.7% and 5.2% growth in average ticket. Walmart International saw total sales increase 2.1% to $27.6B.
The Bentonville giant noted share gains in the U.S. grocery market during the quarter, but also warned consumers are very pressured.
Consolidated gross profit rate declined 44 basis points, primarily due to strong sales growth and lower COVID-related costs, partially offset by reorganization and restructuring charges incurred in the International segment.
Adjusted operating income was up 6.9% to $6.4B.
CEO update: "Weâre excited about our momentum. The team delivered a strong quarter to finish the year, and as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year. We built momentum in the third quarter and that continues. We are well-positioned to start this fiscal year."
Looking ahead, Walmart (WMT) said it sees consolidated net sales growth of 2.5% to 3.0% constant currency. Walmart U.S. comparable sales are forecast to increase 2.0% to 2.5% (ex-fuel) and Samâs Club U.S. comparable sales are anticipated to increase about 5.0% (ex-fuel). EPS is seen landing in a range of $5.90 to $6.05 vs. $6.51 consensus.
Shares of Walmart (WMT) dropped 3.89% premarket on Tuesday to $140.88. Target (TGT) was down 2.10% and Costco (COST) showed a 1.25% decline.
Compare financial metrics on Walmart, Target and Costco side by side.