Walmart hikes annual forecast as low price focus draws shoppers
The company's results show it has continued to benefit from growing price sensitivity among Americans, with revenue of $177.4 billion in the second quarter. Analysts on average were expecting $176.16 billion, according to data compiled by LSEG.
Consumer sentiment has weakened due to fears of higher inflation, hitting the bottom lines of some retail chains, but Walmart's sales have remained resilient.
The retailer expects annual sales to grow in the range of 3.75% to 4.75%, compared to its prior forecast of a 3% to 4% increase. Adjusted earnings per share is expected in the range of $2.52 to $2.62, compared to its previous range of $2.50 to $2.60.
The Bentonville, Arkansas-based chain got a boost from a sharper online strategy as more customers relied on home deliveries. Its global e-commerce sales jumped 25% during the quarter, and it touted that one-third of deliveries from stores took three hours or less.
Walmart's total U.S. comparable sales rose 4.6%, fueled by solid demand in grocery, health and wellness, and online sales, beating analysts' estimates of a 3.8% increase, according to data compiled by LSEG.
Average spending at the till rose 3.1% from 0.6% last year. It logged 40% growth in marketplace sales, including electronics, automotive, toys, and media and gaming.
The retailer had warned it would increase prices this summer to offset tariff-related costs on certain goods imported to the U.S., a move that drew criticism from President Donald Trump. Several other apparel, footwear, and packaged goods retailers have issued similar warnings in response to import tariffs.
A day earlier, Target (TGT.N), opens new tab warned of tariff-induced cost pressures, even as it reiterated that price increases would be considered only as a last resort.
Two-thirds of Walmart's U.S. sales were from domestically-sourced products, executives had said last quarter, which gave it some insulation from tariffs compared to competitors.
Walmart's projection of third-quarter sales at $168 billion was below Wall Street estimates for sales of $176.33 billion.
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