Walmart Shares Rise After Earnings Rise, Surpassing $500 Billion Market Cap - Latest Global News

Walmart Shares Rise After Earnings Rise, Surpassing $500 Billion Market Cap

Walmart (WMT) wowed Wall Street again, sending shares up about 6% in early trading Thursday.

For the first quarter of fiscal 2025, America’s largest retailer reported revenue of $161.51 billion, higher than expected $159.58 billion, while adjusted earnings per share were also higher at $0.60 , compared to estimates of $0.53.

CEO Doug McMillion called it a “great quarter” in the press release, adding that the team is “focused on saving our customers both money and time.”

Total U.S. same-store sales rose 3.9% from a year ago, led by 4.4% growth at Sam’s Club, as Americans sought deals on grocery items.

The namesake stores saw same-store sales increase 3.8%, driven by more frequent customers, even though ticket sizes remained the same. The company suggested it was gaining market share among higher-income households.

Global e-commerce sales increased 21%, driven by in-store pickup and delivery and the online marketplace.

These results come as the company plans to cut hundreds of jobs and ask its employees to relocate to its headquarters in Bentonville, Arkansas, the WSJ reported Tuesday.

Walmart is the largest employer in the United States with 1.6 million U.S. workers.

During the quarter, the company also conducted a stock split for the 12th time in 50 years. Its shares have risen 13.9% this year, outperforming the S&P 500 (^GSPC) 10% profit.

Ahead of the report, UBS analyst Michael Lasser wrote in a note to clients that “the stock still has room to run.” He added that the first quarter “should provide further evidence that the stock is a good fit for what the market is currently looking for: a stable business that is better insulated from ongoing macroeconomic pressures than the rest of the pack.”

“Walmart is in a dual tailwind position to attract both low- and high-end customers in the coming years,” Deutsche Bank analyst Krisztina Katai told Yahoo Finance by phone ahead of the report.

HSBC analyst Daniela Bretthauer called the stock a top pick ahead of the report.

“The future of grocery shopping will be increasingly omnichannel, and Walmart is America’s largest grocer,” Bretthauer told Yahoo Finance. “You have a big online player, which is Amazon, but in grocery … Walmart has a big advantage.”

Merchandise sales fell in the low single digits, as in the last three quarters. But U.S. grocery sales rose in the mid-single digits, driven by sales of more fresh foods and private-label items, Stifel Chief Executive Mark Astrachan wrote in a note to clients after the results.

The company is benefiting from its pricing power and economics, as well as technology investments and its $9 billion store remodels.

The company recently launched a new private label brand called bettergoods, offering higher quality, trendier items priced from under $2 to under $15.

Its lucrative advertising business is also boosting its revenue, recording a 24% increase in global sales and a 26% increase in US sales.

According to Bloomberg consensus data, Wall Street expects the following from Walmart in the first quarter of fiscal 2025 compared to the first quarter of 2024:

Revenue: $161.51 billion versus $159.58 billion

Adjusted earnings per share: $0.60 versus $0.53

Sales growth at the same store in the USA: 3.9% vs. 3.42%

Same-store sales at Walmart in the US: 3.8% vs. 3.45%

Sam’s Club US same-store sales growth: 4.4% vs. 3.3%

Walmart US e-commerce growth: 22% vs. 13.33%

Walmart employee fills Instacart orders at produce aisle in North Carolina.  (Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)

Walmart employee fills Instacart orders at produce aisle in North Carolina. (Lindsey Nicholson/UCG/Universal Images Group via Getty Images) (UCG via Getty Images)

For the full fiscal year 2025, the company expects net sales growth in the high range of 3% and 4% and operating income growth in the high range of 4% to 6%.

“We expect Walmart US and Sam’s Club US net sales growth to decline in line with the company and that international growth will exceed company growth. “We expect all three segments to contribute to operating income growth, led by Walmart US, Walmart International and then Sam’s US,” Walmart CFO John David Rainey said on a call with investors following fourth-quarter 2024 results.

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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