Walmart (WMT) Stock News: Online sales surge leads to full-year guidance raise

Walmart beats heartily on revenue consensus for Q1.
Online sales jump 26% YoY, but gross margin to drop slightly for full year.
WMT stock jumps 1.5% but needs to overtake $153.50.
Full-year adjusted EPS guidance rises to $6.10-$6.20 range.

Clay Webster FXStreet

Walmart’s (WMT) raised guidance for the rest of the year on Thursday after reporting a 26% explosion in online sales during the fiscal first quarter. The world’s largest retailer reported revenue in the first quarter of $152.3 billion – $4.4 billion above the analyst average – as the company’s heavy investment into its online presence finally started paying dividends.

Walmart stock rose 1.5% to $151.76 on the news, while Dow and S&P 500 futures rose gingerly between 0.1% and 0.2%.

Walmart earnings news: Outlook raised on full-year profits

Revenue rose 7.7% YoY overall, which largely stemmed from 7.4% growth in comparables. The company’s Sam’s Club grocery stores experienced their largest influx of new members on a quarterly basis ever. Additionally, grocery sales company wide gained market share as management said it made inroads with wealthier customers.

“We leveraged expenses, expanded operating margin and grew profit ahead of sales,” said CEO Doug McMillon in a statement accompanying the results.

Adjusted earnings per share arrived at $1.47, a full 15 cents or 11% ahead of Wall Street’s consensus heading into the quarter.

For the full year, management raised its outlook. Shareholders should now expect between $6.10 and $6.20 in adjusted EPS, compared to the $5.90 to $6.05 range that was voiced on the prior earnings call. Consolidated net sales are also expected to rise by 3.5% rather than the 2.5% to 3% range given in the past.

For the full year, Walmart says that gross margin will drop 18 basis points to 23.7% as the retailer shifts to a heavier reliance on its grocery division from general merchandise. However, that shift will be aided by a 58 basis point drop in operation expenses to 20.4%.

Walmart bought back $686 million in stock during the first quarter but still has $18.6 billion left to purchase under the board’s current mandate.

Walmart stock forecast

With WMT stock trending higher in Thursday’s premarket, bulls will have their sights set on $153.50. This level served as strong resistance at the end of November 2022 and then again in both April and May of this year. A failure to break this level will turn it into a dangerous double top. A break, however, would give the market a chance to retest the range high at $160 from April of last year.

Failing the retest at $153.50 though would send Walmart stock back to support at $146.50.

WMT daily chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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