Walmart reported another strong quarterly performance on Thursday, surpassing Wall Street expectations, but the retail giant tempered its optimism with a cautious outlook for the remainder of the year, citing ongoing economic uncertainty.
Quarterly Results
The company posted first-quarter earnings of $5.1 billion, or $1.88 per share, compared with $4.2 billion, or $1.55 per share, in the same period last year. Adjusted earnings per share came in at $1.92, beating analyst estimates of $1.85. Revenue rose 4.8% to $161.5 billion, also above expectations.
U.S. same-store sales increased 3.9%, driven by strong grocery and health & wellness categories. E-commerce sales grew 21% as customers continued to embrace online shopping and delivery options.
Cautious Outlook
Despite the solid results, Walmart issued a cautious forecast for the second quarter and full year. The company expects adjusted earnings per share of $1.55 to $1.60 for the second quarter, below analyst estimates of $1.70. For the full year, Walmart now expects earnings of $6.50 to $6.80 per share, compared with its previous forecast of $6.60 to $6.90.
Chief Financial Officer John David Rainey said in a statement: "We continue to see a customer that is resilient but also value-conscious. While inflation is moderating, there remains uncertainty around the macroeconomic environment, including interest rates and geopolitical tensions."
Factors Affecting Outlook
Walmart cited several factors for its cautious outlook, including persistent inflation, higher interest rates, and geopolitical tensions. The company also noted that it is seeing some shifts in consumer spending patterns, with more customers trading down to lower-priced items and seeking value.
"We're seeing customers prioritize essentials over discretionary items," Rainey added. "They're also increasingly using our pickup and delivery services to save time and money."
Strategic Initiatives
Walmart continues to invest in its omnichannel capabilities, including expanding its third-party marketplace, improving its supply chain, and enhancing its digital offerings. The company recently launched a new drone delivery service in partnership with Zipline in Pea Ridge, Arkansas, and is testing autonomous vehicle delivery in several markets.
"We're focused on providing convenience and value to our customers," said CEO Doug McMillon. "Our investments in technology and innovation are paying off, and we're well-positioned for long-term growth."
Shares of Walmart were down about 2% in premarket trading following the cautious outlook, but the stock has gained 15% over the past year.
