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Retail Giant Walmart Boosts Annual Sales, Profits

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Retail Giant Walmart Boosts Annual Sales, Profits

(CTN News) – On Thursday, Walmart Inc increased its annual sales and profit targets as it benefited from price-conscious shoppers trading down to cheaper groceries, easing worries of consumer spending softening as a result of inflation and easing worries about the economy.

According to data released by the company, its shares rose about 2.6% in the first quarter as it reported better-than-expected results.

There is no question that Walmart has kept grocery prices low to maintain its competitive advantage over Target Corp and Kroger, even as the industry is struggling with higher costs, especially for labor, in order to survive.

Therefore, Walmart’s U.S. stores that have been open at least a year increased sales by 7.4% in the first quarter ended April 30, excluding fuel, which beat expectations of a 5.25 percent increase.

Reuters quotes CFO John Rainey as saying, “We see clearly that the trade down has continued as consumers continue to focus on lower price proteins or lower pack sizes, but we also see that private brand penetration has continued to do incredibly well for us in the quarter.”

Despite Target’s bleak forecast for the second quarter, due mostly to weak consumer demand, the company’s strong results stand in stark contrast to its smaller rival’s strong results. In the second quarter of this year, Walmart is forecasting higher results than expected.

According to the retailer, full-year earnings per share are now expected to range between $6.10 and $6.20 compared with the prior estimate of $5.90 to $6.05. Definitive data shows that analysts on average were expecting the retailer to post a profit per share of $6.16, up from $6.04 previously.

It is also predicted that net sales will rise by approximately 3.5%, which is higher than the company had forecast previously.

There was a 26% increase in online sales compared to the 1% increase a year ago and 17% increase in the previous quarter.

The company’s operating income rose 17.3% to $6.24 billion in the quarter, while Walmart’s adjusted earnings per share came in at $1.47 per share, higher than expected, beating analysts’ expectations.

The CEO, Doug McMillon, said that the company leveraged expenses, expanded operating margins, and increased profit ahead of sales by more than 20 percent.

Due to Walmart’s focus on low-margin groceries as well as its main merchandise, Walmart’s gross margin decreased by 18 basis points. It should be noted however, that the decline was less than the 83 basis point decline recorded in the previous quarter.

There was an increase of 7.6% in net revenue to $152.30 billion in the first quarter, beating the estimates of $148.76 billion by 7.6%.

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