Walmart (NYSE:WMT) is focusing on supply chain innovation to improve unit costs and drive growth. Moreover, the retail giant reaffirmed its Fiscal 2024 guidance.
Walmart said that by the end of 2026, about 65% of stores would be serviced by automation. Furthermore, it expects 55% of the fulfillment center volume to move through automated facilities. Walmart believes that the move will likely improve its unit cost averages by approximately 20% and cushion its bottom line.
While Walmart is focusing on driving efficiency, it reiterated its first-quarter and full-year guidance for the fiscal year 2024. For Q1, WMT expects its consolidated sales to increase by 4.5-5% on a constant currency basis. Meanwhile, it projects earnings to be in the range of $1.25 to $130. The EPS outlook includes a LIFO (Last In, First Out) impact of $0.03.
As for the full year, WMT expects its top line to increase by 2.5-3.0% on a constant currency basis. Meanwhile, adjusted EPS is forecasted to be in the range of $5.90 to $6.0, including a LIFO impact of $0.14.
Walmart expects its omnichannel business model and improved category and business mix will help the company achieve 4% sales growth over the next five years.
At the same time, the scaling of high-margin value streams will lead to a 4%+ increase in its operating income over the next three to five years.
What is the Prediction for WMT?
While the company is targeting profitable growth, Wall Street analysts are bullish about WMT stock. It has received 23 Buy and four Hold recommendations for a Strong Buy consensus rating. Meanwhile, analysts’ average price target of $163.79 implies 11.25% upside potential.
