Walmart Gains Post Q2 Results; Reveals Pressure On FY23 Profit Expectations

Walmart Gains Post Q2 Results; Reveals Pressure On FY23 Profit Expectations
  • Walmart Inc WMT reported second-quarter FY23 revenue growth of 8.4% year-on-year, to $152.86 billion, beating the consensus of $150.75 billion.
  • Net sales from Walmart U.S. increased 7.1% Y/Y, Walmart International rose 5.7%, and Sam's club jumped 17.5%.
  • Excluding fuel, Walmart's U.S. Q2 comp sales grew 6.5% and 11.7% on a two-year stack. eCommerce growth was 12% and 18% on a two-year stack.
  • The operating margin was 4.5%, and operating income for the quarter fell 6.8% to $6.9 billion.
  • Also Read: Walmart Spices Up Amazon Rivalry By Collaborating With Paramount - Report
  • The company held $13.9 billion in cash and equivalents as of July 31, 2022.
  • Cash provided by operating activities totaled $9.2 billion for the six months, with a free cash flow of $1.7 billion.
  • Adjusted EPS was $1.77 versus $1.78 last year.
  • "The actions we've taken to improve inventory levels in the U.S., along with a heavier mix of sales in grocery put pressure on the profit margin for Q2 and our outlook for the year," said Doug McMillon, President and CEO, Walmart.
  • Outlook: Walmart sees a Q3 FY22 adjusted EPS decline of 9% - 11%. Q3 net sales growth of 5%, negatively affected by about $1.3 billion from currency fluctuations.
  • For FY23, the company currently expects Adjusted EPS to decline 9.0% - 11.0%. Excluding divestitures, adjusted EPS is expected to decline 8.0% - 10.0%.
  • It expects FY23 consolidated net sales growth to be about 4.5%.
  • WMT maintains its expectations for Walmart U.S. comp sales growth, excluding fuel, of about 3% in the second half of the year. For the full year, the company expects Walmart U.S. comp sales growth, excluding fuel, of about 4%.
  • Price Action: WMT shares are trading higher by 4.10% at $138.05 in premarket on the last check Tuesday.
  • Photo Via Company

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