Walmart Inc. has issued its financial results for the first quarter of fiscal year 2024. The company reached an adjusted EPS of $0.61, beating analyst estimates by $0.02. The retail giant’s revenue hit a staggering $165.6 billion, blowing past predictions by over $2 billion. The company has been doing very well despite the continued, meaningful headwinds posed by tariffs. Yet these tariffs lead to legitimate fears of major price increases for consumers in the coming months.
The report, released recently, highlights a 4.5% year-over-year increase in comparable sales in the United States. This figure beats the consensus estimate of 3.9% and shows strong consumer demand. Furthermore, Walmart’s international eCommerce segment saw its remarkable global growth of 22% year-over-year.
Strong Domestic Performance
After analysing Walmart’s second quarter results, our take is that the company’s huge domestic operations have never been healthier. The 4.5% growth in comparable sales shows a winning formula in luring and keeping customers. Units are up 1.6% compared to a year ago. This dramatic increase is a reflection of how much more shoppers are gravitating toward Walmart’s stores and digital platforms.
The average ticket per transaction increased 2.8% YOY. This increase indicates that shoppers aren’t just making more trips to stores, but are spending more in each trip. When taken together, these metrics illustrate Walmart’s power to pull traffic and dollars, even in the face of an uncertain economy.
Chief Financial Officer of Walmart, John David Rainey, said the retail and other sectors continue to be challenged by tariffs. He stated, “We’re wired for everyday low prices, but the magnitude of these [tariff] increases is more than any retailer can absorb.” His reaction shines a light on how the increasing tariffs could undermine Walmart’s everyday low price policy. This pricing philosophy has historically influenced the company’s go-to-market focus.
International Sales and Future Outlook
As well as its domestic performance was, Walmart’s international sales fell by 0.3% over last year. This significant drop is concerning both for worldwide market conditions in general and consumer spending in particular beyond the borders of the United States. Even with this blow, Walmart feels pretty good about its financial picture for the rest of the fiscal year.
Walmart expects full year net sales to be up 3% – 4%. They further forecast adjusted operating income to increase by 3.5% to 5.5%. These optimistic forecasts are a sign of a guarded, positive outlook as the company continues to pursue domestic growth while battling headwinds from overseas.
Rainey bemoaned the effect these tariffs would have on consumers. He explained, “It’s too much for any one supplier to bear. I’m worried that consumer is going to begin feeling the impact through higher prices. If all goes well, you’ll begin seeing these changes by the end of this month. Come June, you’ll start to see even more transformational changes. His comments suggest that this is just the latest chapter in Walmart’s ongoing success. External economic pressures may be enough to quickly shift consumers’ habits.
Stock Performance and Market Position
Touted as a threat to Amazon’s growing dominance, Walmart’s stock price has wildly gyrated lately in response to these moves. As things stand, its 50-day Simple Moving Average (SMA) is bouncing just above $91 — and prior support has formed at $90. Analysts note that Walmart’s stock price has not bounced back to its earlier highs, as it recorded a lower high compared to February’s peak above $105.
This pricing trend in the stock market reflects investor sentiment regarding Walmart’s ability to manage costs and maintain profitability in an increasingly challenging economic environment marked by rising inflation and tariff pressures.