Walmart raises forecasts, tops sales estimates as lower prices pull in shoppers
By Aishwarya Venugopal and Siddharth Cavale
(Reuters) -Walmart Inc raised its full-year forecasts and beat second-quarter sales and profit estimates on Thursday, citing strong demand for its low-priced groceries and health and wellness products.
Shares in Walmart (NYSE:WMT), which have climbed 12.3% this year, were up about 3% in premarket trading.
«The reports of the death of the U.S. consumer are greatly exaggerated… The earnings report from the world's largest retailer certainly checked all the boxes,» Art Hogan, chief market strategist at B Riley Wealth, said.
«The strong report also bodes well for the back-to-school, and holiday shopping seasons,» he added.
Sales at Walmart's U.S. stores open at least a year rose 6.4%, excluding fuel, in the three months ended July 31, beating estimates of a 4.44% increase, according to Refinitiv data.
This was mainly driven by high-single-digit growth in grocery and high-teens growth in health and wellness products, including weight loss inducing diabetes drugs, such as Ozempic. General merchandise sales in the United States declined in the quarter, but the performance was better than the prior quarter, with back-to-school categories performing well.
U.S. retail sales for July increased more than expected as Americans boosted online purchases and dined out more, suggesting the economy continued to expand early in the third quarter despite a succession of interest rate hikes to bring down inflation.
Walmart's average transactions in the U.S. rose 2.9%, while average receipts increased 3.4%, the company said.
However, Walmart Chief Financial Officer John David Rainey, sounded a note of caution, saying Americans may still see a hit to their spending power in the coming year to 18
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