Walmart Sees Growth In Q3, Lifts FY25 View After Q2 Sales Rise; Stock Up

(RTTNews) - Shares of Walmart, Inc. were gaining around 8 percent in the pre-market activity on the NYSE after the retail behemoth on Thursday issued third-quarter guidance, expecting growth, and also raised its fiscal 2025 forecast. Meanwhile, adjusted earnings forecast for the third quarter is below the market estimates, and for fiscal 2025 is in line or below the Street view.

The revision in full-year outlook was after reporting higher second-quarter operating income and net sales, despite weak net profit. Walmart U.S. comp sales also increased 4.2 percent.

Doug McMillon, President and CEO, said, "Each part of our business is growing - store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model."

For the third quarter, the company projects adjusted earnings per share between $0.51 and $0.52, net sales growth of 3.25 percent to 4.25 percent and operating income growth of 3.0 percent to 4.5 percent in constant currency or CC.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.54 per share on sales of $167.05 billion. Analysts' estimates typically exclude special items.

In the prior-year third quarter, the company's adjusted earnings were $0.51, net sales were $159.4 billion, and operating income was $6.2 billion.

Further, for fiscal 2025, Walmart now expects adjusted earnings in a range of $2.35 to $2.43 per share on consolidated CC net sales growth of about 3.75 percent to 4.75 percent, and adjusted operating income growth of 6.5 percent to 8.0 percent.

The company previously expected adjusted earnings in a range of $2.23 to $2.37 per share on net sales growth of about 3 to 4 percent and adjusted operating income growth of 4 percent to 6 percent.

The Street is looking for earnings of $2.43 per share on a sales growth of 13.70 percent percent to $676.5 billion for the year.

In fiscal 2023, the company's adjusted earnings were $2.22 per share, net sales were $642.6 billion, and adjusted operating income was $27.1 billion.

In its second quarter, net income attributable to Walmart decreased 43 percent to $4.501 billion or $0.56 per share from last year's $7.891 billion or $0.97 per share.

Adjusted earnings were $0.67 per share for the period. Analysts expected earnings of $0.65 per share for the quarter.

Operating income grew 8.5 percent, and adjusted operating income went up 7.2 percent due to higher gross margins and growth in membership income.

The company's revenue for the quarter rose 4.8 percent to $169.34 billion from $161.63 billion last year.

Net sales grew 4.7 percent year-over-year to $167.77 billion, and the growth was 16 percent in Membership and other income to $1.57 billion.

Consolidated revenue grew 5 percent at constant currency rates.

In the quarter, eCommerce sales climbed 21 percent globally, led by store fulfilled pickup & delivery and marketplace. Global advertising business grew 26 percent, including 30 percent for Walmart Connect in the U.S.

Walmart U.S.net sales grew 4.1 percent from last year to $115.3 billion, and Comp sales, excluding fuel, increased 4.2 percent, reflecting strength in transaction counts and unit volumes, across both stores and eCommerce channels.

Walmart International net sales went up 7.1 percent to $29.6 billion.

Sam's Club U.S. net sales were $22.9 billion, up 4.7 percent, and comp sales, excluding fuel, grew 5.2 percent, led by food and health & wellness as well as increases in transactions and unit volumes.

In pre-market activity on the NYSE, Walmart shares were gaining around 7.5 percent to trade at $73.85.

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