Why is Walmart Going over $1000? Record Breaking Revenue and Earnings of $140 Billion

 

Walmart’s fiscal Q3 earnings on Tuesday topped analysts’ expectations with strong sales and holiday preparation for even bigger holiday season.

  • Revenue of $140.50 Billion
  • U.S.eCommerce sales grew 8% for the quarter and 87% on a two-year stack.
  • The company expects U.S. Q4 comp sales of around 5%.

Walmart CEO Doug McMillon said the retailer is optimistic about the holidays and will have shelves stocked. Inventory for Walmart in the U.S. is up 11.5% ahead of the busy shopping season, he said. The retailer ordered its seasonal merchandise early and has prioritized space for it on ships.

Third quarter highlights:

  • Walmart raises full-year guidance
    • Walmart U.S. comp sales above 6%, excluding fuel
    • FY22 GAAP EPS of around $5.00; Adjusted EPS of around $6.40 versus prior guidance of $6.20-$6.35
    • FY22 capital expenditures of around $13 billion
  • Total revenue was $140.5 billion, up 4.3%, negatively affected by approximately $9.4 billion related to divestitures. Excluding currency, total revenue would have increased 3.3% to $139.2 billion
  • Walmart U.S. eCommerce sales grew 8% for the quarter and 87% on a two-year stack.
  • Sam’s Club comp sales increased 13.9%, and 25% on a two-year stack. E-commerce sales grew 32%. Membership income increased 11.3%, which is the fifth consecutive quarter of double-digit growth.
  • Walmart International net sales were $23.6 billion, a decrease of $5.9 billion, or 20.1%, negatively affected by $9.4 billion related to divestitures. Changes in currency exchange rates positively affected net sales by approximately $1.3 billion. Flipkart (FPKT), China, and Mexico delivered strong growth in eCommerce.
  • Consolidated gross profit rate decreased 42 basis points, primarily due to increased supply chain costs, a higher mix of lower margin fuel business in the U.S. and a shifting international format mix.
  • Consolidated operating expenses as a percentage of net sales declined 4 basis points reflecting strong sales growth and lower expenses for COVID-19, offset by investments in wages.
  • Consolidated operating income was $5.8 billion, an increase of 0.2%, negatively affected by $0.4 billion related to divestitures, or about 750 basis points.
  • Repurchased $7.4 billion in shares year to date, representing around 35% of the $20 billion authorization announced earlier this year.

 

“Our momentum continues with strong sales and profit growth globally. Our omnichannel focus is pushing digital penetration to record levels. We gained market share in grocery in the U.S., and more customers and members are returning to our stores and clubs around the world,” said CEO Doug McMillon.

Walmart, known for its emphasis on “Everyday Low Price,” is one of the retailers that stands to better weather a period of rising prices. As consumers feel sticker shock, they may buy more of their groceries, clothes and other goods at the retailer’s stores and website instead of turning to competitors.

“We’ve always been an inflation fighter for customers,” Walmart Chief Financial Officer Brett Biggs said in an interview with CNBC. “Our scale and the product breadth that we have allows us to do things in a way that is beneficial to customers and beneficial to shareholders.”

Walmart offers an equitable wage as well as several facilities. The company believes in internal promotion and many of their hourly wage workers join management after years of service.

They also offer educational loans and more to encourage employees to up skill and improve their salaries and job positions.

CWEB Analyst’s have initiated a STRONG BUY Rating for  Walmart (NYSE:WMT) and potential upside of $1500. Amazon has less revenue and it is trading  over $3000. The fundamentals of Walmart are to strong and cash on hand has increased and staggering revenues have contributed even to bigger growth. Amazon revenue for Q1 2021 was $104 Billion and it is very realistic for Walmart to go above$1500 and $2000 very soon.

 

photo ID: 1497390740

 

 

 

 


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