US retail giant Walmart, headquartered in Arkansas, on Tuesday, November 19, raised its annual sales and profit forecast for the third time in a row.
Currently, people are buying more groceries and merchandise on the mentioned company’s virtual platform and in stores included in the network structure of its physical presence. Against this background, there are likely signs that the retail giant is increasing its market share ahead of the holiday season.
On Tuesday, during the premarket trading, the value of the company’s shares showed an increase of about 4%. It is worth noting that since the beginning of the current year, the corresponding indicator has risen by almost 60%.
Walmart is one of the first major US chains to provide insight into the all-important holiday quarter and how consumers are planning to spend as inflation ebbs.
The company chief executive officer Doug McMillon said that in the United States, in-store volumes were growing, pickup from stores showed an even more intense upward dynamic, and delivery from stores increased at a rate exceeding the pace of the previous two indicators.
In recent months, the US has not seen any significant achievements in the context of countering inflation. At the same time, the corresponding indicator in the United States is currently on a steady decline trajectory. Against this background, purchasing power is growing in the country.
Walmart recorded share gains across income cohorts mainly led by upper-income households, which make more than $100,000 in annual income.
The retail giant currently predicts that in fiscal 2025, its consolidated net sales will show growth in the range of 4.8% to 5.1%. It is worth noting that the previous version of the corresponding forecast provided an increase in the mentioned indicator in the range from 3.75% to 4.75%.
The company also expects annual adjusted profit per share to be between $2.42 and $2.47. The previous version of this forecast provided that the mentioned indicator would be observed in the range from $2.35 to $2.43.
Retailers, including Walmart, Amazon.com, and Target kicked off the holiday shopping season earlier than usual. These companies offer deals on all product categories, including, among others, toys and household items.
Walmart and Target have increased the range of products under their private brands and expanded the range of groceries. Appropriate actions are constructive and appropriate in the context of the tendency, which is that consumers seek to purchase essentials and gifts at the lowest possible price.
Walmart said that most of its customers are sticking to their holiday plans, despite the election, calendar shift, and the state of affairs in the economic space.
Minkyung Kim, Assistant Professor of Marketing at Carnegie Mellon University’s Tepper School of Business, said that Donald Trump’s victory in the United States presidential election could weigh on some shoppers. In this case, it implies Mr. Trump’s repeatedly declared intention to raise tariffs on goods imported from other countries, primarily from China. A US trade group of which Walmart’s US head is the chair, said that the potential implementation of the mentioned intention could provoke an increase in prices for a wide range of products, including toys, clothing, footwear, appliances, furniture, travel goods. It was noted separately that the materialization of the corresponding scenario would be a particularly sensitive factor affecting products which main suppliers are based in China.
Walmart’s revenue for the quarter ended October 31 was fixed at $169.59 billion. For the same period last year, the corresponding figure amounted to $160.80 billion. It is worth noting that the LSEG consensus forecast provided that the retail giant’s revenue for the mentioned quarter would be fixed at $167.72 billion.
The company’s net income for the quarter ended October 31 was $4.58 billion. For the same period last year, the corresponding figure was fixed at $453 million.
Walmart US transactions in the quarter ended October 31 increased 3.1% year-on-year. The average ticket in this case rose by 2.1% compared to the figure for the same period in 2023.
Walmart’s sales in the e-commerce area in the United States grew 22% year-on-year last quarter. This result is largely related to curbside pickup and home delivery. The upward dynamic was also affected by the growth in Walmart’s advertising and third-party marketplace businesses.
In addition, over the last two quarters, 30% of the company’s customer orders in the US have come with an extra fee to get delivery within a shorter time frame.
As we have reported earlier, Walmart Launches Gamified Marketplace.
