Walmart Beats Lowered Profit Estimates, Boosts Forecast
Walmart's adjusted earnings were $1.77 a share during the second quarter topping the $1.63 average of analysts’ estimates.
(Bloomberg) -- Walmart Inc. surpassed Wall Street’s diminished profit expectations for the second quarter and modestly improved its full-year forecast, signaling that it’s steadying operations after slashing its outlook three weeks ago.
Adjusted earnings were $1.77 a share during the second quarter, Walmart said Tuesday, topping the $1.63 average of analysts’ estimates compiled by Bloomberg. Earnings per share will fall no more than 11% this year as a whole, compared with last month’s warning for a drop of as much as 13%.
Walmart is trying to weather a shift in consumer spending habits as inflation forces shoppers to pay more for essential goods. That’s leaving less money for purchases of general merchandise, which are typically more lucrative for Walmart than groceries, while also forcing the company to mark down prices on apparel and other items to deal with its bloated inventory.
“The actions we’ve taken to improve inventory levels in the US, along with a heavier mix of sales in grocery, put pressure on profit margin for Q2 and our outlook for the year,” Walmart Chief Executive Officer Doug McMillon said in the statement. “We made good progress throughout the quarter operationally to improve costs in our supply chain, and that work is ongoing.”
Walmart rose 3.8% ahead of regular trading in New York. The shares fell 8.4% this year through Monday, trailing the 1.6% decline in an S&P index of consumer-staples companies.
Sales rose 8.4% to $152.9 billion in the fiscal second quarter, which ended July 31, Walmart said. Analysts had predicted $151.1 billion.
Inventory at the Bentonville, Arkansas-based retailer rose 25% from a year earlier to $59.9 billion.
Walmart’s profit warning last month was the second cut to the company’s annual forecast. In May, Walmart said earnings per share would dip about 1%. In February, the company had predicted a modest increase.
(Updates with forecast in first paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.