Walmart CFO: Shoppers are hanging in there
08/15/2024 22:26
Walmart CFO John David Rainey keeps it real on the state of the American shopper.
Bending, but not breaking... yet.
That's the vibe around the inflation-battered crowds wandering the aisles for the latest price rollbacks from Walmart (WMT), CFO John David Rainey tells Yahoo Finance (video above).
"The consumer is hanging in there," Rainey said Thursday, moments after better than expected earnings from America's largest retailer hit the wire.
Walmart's second quarter showed a retailer capitalizing on penny-pinching consumers, who are worried about nagging inflation, a contentious election season, and what appears to be a job market slowdown.
The company beat Wall Street estimates on sales and earnings, powered by a 4.2% comparable sales gain at its largest division — the namesake US business.
Walmart US saw sales gains in higher frequency product categories such as food and health and wellness. Conversely, cautious shoppers visited discretionary departments like furniture and apparel less often.
Walmart's US e-commerce sales rose a hearty 22%, also above estimates.
With the wind at its back, Walmart lifted its full year sales and profit outlooks.
Shares of Walmart rose 6.5% in early trading.
Rainey adds the back to school shopping season is off to a "good" start.
"We continue to see potential upside ahead as traffic remains strong and e-commerce losses improve—we expect automation tech and AI to continue to play integral roles. Walmart's strength continues, and with this improved consistency, as well as scaling of higher-margin rev streams, we believe a higher multiple is warranted," Jefferies analyst Corey Tarlowe said in a note to clients.
Q2: The earnings rundown
Net sales: $169.3 billion, +4.8% from the prior year vs. $168.46 billion estimate
Adjusted EPS: $0.67, +9.8% from the prior year vs. $0.65 estimate
Walmart US comparable sales: +4.2% vs. +3.4% estimate
Sam's Club US comparable sales: +5.2% vs. +3.9% estimate
Walmart US e-commerce sales growth: +22% vs. +16.9% estimate
What else caught our attention: Forward guidance
Q3 EPS: $0.51-$0.52 vs. $0.55 estimate
Full Fiscal Year Guidance
Net sales: +3.75% to +4.75% (original: +3% to +4%)
Diluted EPS: $2.35 to $2.43 (original: $2.23 to $2.37; estimates: $2.43)
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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].