On Tuesday, Walmart reported good Christmas season sales as consumers on a tight budget in search of better discounts flocked to its stores.
Because consumers generally reduced their spending during the customary November–December shopping season, the report represented a strong performance for the company.
Despite increasing prices and several interest rate increases by the Federal Reserve to address the issue, sales at stores and restaurants recovered last month, demonstrating that consumers are still spending.
The biggest retailer in the country also reported full-year sales of $611.3 billion, an increase of 6.7% over the previous year.
Nonetheless, it provided cautious guidance for the upcoming fiscal year, stating that it anticipates sales to rise by 2.5% to 3% and U.S. sales to expand by 2% to 2.5%. Moreover, it projected adjusted profits per share, excluding fuel, in the $5.90 to $6.05 range.
According to FactSet’s survey of analysts, the average EPS prediction was $6.52. In premarket trading, shares decreased by 4% further.
During the pandemic, Walmart, Amazon, and other shops experienced growth as housebound customers spent more on luxuries like home decor.
Consumers are now concentrating more on basics, such as groceries, leaving the business with a glut of extra inventory and dented profits it could make from high-margin discretionary merchandise.
In recent quarters, the big-box retailer has observed that consumers keep an eye on their spending and switch to private brands in categories like baked products to reduce prices.
The company has stated that it hopes to stay high-income customers by providing fresh food and clothes selections.
High-income customers searching for great bargains on groceries have also been flocking to its stores.
In the three months that concluded on January 27, the business recorded sales of $164 billion, an increase of 7.3% over the same time the previous year.
Earnings increased from $3.56 billion to $6.28 billion a year earlier. They achieved $1.71 per share, beyond Wall Street projections of $1.52 when one-time costs and benefits were considered.
According to the National Retail Federation, holiday sales increased overall in November and December by a weaker-than-anticipated 5.3%, down from a 13.5% increase in 2021.
Major stores like Walmart and Target started offering discounts in October to encourage consumers to spread out their buying.
Also, the famous Black Friday doorbusters were replaced by sales that lasted for several weeks.
Comparable sales in established stores and online during the previous 12 months increased by 8.3%, up from 8.2% in the last quarter. 17% more was spent online.
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