Market News

WMT Rattles the Markets with a Dismal Outlook

Shares of  Walmart (NYSE: WMT) inched down in morning trading on Tuesday after the retailing giant’s CFO John David Rainey told CNBC following its Q4 earnings that higher grocery prices remained a concern due to persistent inflation resulting in shoppers buying fewer discretionary items. Walmart has the largest grocery business in the U.S. in terms of revenue. This has led WMT to issue a cautious outlook for FY24.

Looking forward, management now expects revenues to increase in Q1 in the range of 4.5% to 5% on a constant currency basis while adjusted earnings is likely to be between $1.25 and $1.30 per share versus a consensus of $1.37 per share.

In FY24, WMT has projected sales to rise in the range of 2.5% to 3% on a constant currency basis while comparable sales in the U.S. (excluding fuel) are expected to increase between 2% and 2.5%. Adjusted earnings are anticipated to be in the range of $5.90 to $6.05 per share versus consensus estimates of $6.51.

The company reported adjusted earnings of $1.71 per share in Q4 exceeding analysts’ consensus estimate of $1.52 per share.

Revenues increased by 7.3% year-over-year to $164 billion, surpassing Street expectations of $160 billion. The retailer’s comparable sales rose 8.3% in the U.S. and by 13.9% on a two-year basis.

Overall, Wall Street is bullish on WMT stock with a Strong Buy consensus rating based on 16 Buys and three Holds.

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