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Walmart Q1 2023 Results Sees Retail Giant Beat Expectations on Earnings & Revenue despite Prudent Consumer Spending

UTC by Tolu Ajiboye · 3 min read
Walmart Q1 2023 Results Sees Retail Giant Beat Expectations on Earnings & Revenue despite Prudent Consumer Spending
Photo: Depositphotos

Walmart “leveraged expenses and expanded operating margin” in Q1 2023 and now expects a 3.5% increase in consolidated net sales for the year. 

Walmart Inc (NYSE: WMT) has raised its 2023 full-year guidance following its stellar Q1 earnings report. On Thursday, the multinational retail corporation reported better-than-expected revenue, which was boosted by grocery and online businesses.

For the first quarter of the year, Walmart posted revenue of $152.30 billion compared to the $148.76 billion analysts expected. In addition, the Arkansas-based retail giant reported earnings per share of $1.47 adjusted versus $1.32 expected.

Walmart’s Q1 2023 sales grew 8%, with its substantial grocery business counterbalancing underwhelming clothing and electronic sales. Groceries amounted to approximately 60% of annual US sales, with revenue and operating income growing 7.6% and 17.3%, respectively.

The company’s stock rose in premarket trading amid increased guidance to reflect the positive earnings.

Walmart expects a 3.5% increase in consolidated net sales for the financial year. In addition, the retail corporation expects full-year adjusted earnings per share of between $6.10 and $6.20, which analysts also anticipate.

Walmart CEO Expresses Contentment with Q1 2023

Walmart President and Chief Executive Officer Doug McMillon spoke about the company’s latest outing in glowing terms, saying:

“We had a strong quarter. Comp sales were strong globally, with eCommerce up 26%. We leveraged expenses, expanded operating margin, and grew profit ahead of sales. And a big thank you to our associates, who continue to step up and deliver for customers and members whenever and however they want to be served.”

Meanwhile, Walmart Chief Financial Officer John David Rainey drew attention to sustained consumer spending despite more prudent spending habits. According to Rainey, consumers bought smaller pack sizes and spent less on discretionary items while banking on promotions for pricier item purchases. However, despite these strains, consumer spending resilience remained unaffected. In a media session with CNBC, Rainey said:

“I think [the reason for the resilient consumer spending habits] is probably because balance sheets are much stronger than they were pre-pandemic, even at this point.”

Popular American retail chains, such as Home Depot (NYSE: HD) and Target (NYSE: TGT), previously reported more prudent consumer spending habits.

Walmart shares closed Wednesday at $149.53, with a market value of $403.33 billion.

Q4 2022

Walmart’s 2022 fourth-quarter results, released in February, also reflected substantial revenue for the retail giant amid the holiday period. For Q4 2022, the largest retail chain in the US reported revenue of $164.0 billion, with international net sales coming in at $27.6 billion. However, at the time, Walmart said $900 million from currency valuation negatively impacted its international net sales figures.

The retail company maximized consumer spending at the height of inflation by positioning itself as a choice option for cheap deals.

Mcmillon described Walmart’s Q4 2022 results as a great way to finish the year 2022. At the time, the CEO said Q4 built on the momentum gained in the preceding quarter and put Walmart in a prime position for 2023.

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