By Walmart Inc.’s stock (WMT) experienced a 1% drop on Thursday morning following the company’s 2023 guidance that fell short of consensus. However, despite this setback, Walmart still achieved a profit and sales beat for the third quarter.
Financial Performance
In the third quarter, Walmart, headquartered in Bentonville, Arkansas, reported a net income of $453 million or 17 cents per share. This indicated a significant improvement compared to a loss of $1.8 billion or 66 cents per share in the same period last year. Adjusted per-share earnings surpassed expectations at $1.53, slightly higher than the FactSet consensus of $1.52.
Furthermore, the company’s revenue grew by 5.2% to reach $160.8 billion, outperforming the FactSet consensus of $159.7 billion.
Sales Growth
Walmart U.S. saw a notable increase in same-store sales, rising by 4.9%. Additionally, the company experienced substantial growth in e-commerce sales, which surged by 24%.
Future Expectations
While Walmart’s third-quarter performance impressed, the company’s guidance for 2023 failed to meet consensus expectations. Walmart now projects full-year adjusted EPS in the range of $6.40 to $6.48, whereas analysts anticipated $6.50. As for sales growth, the company expects an increase of 5% to 5.5%, slightly lower than the 5% projected by FactSet.
Market Reaction
Walmart’s stock has declined by 23% year-to-date, contrasting with a 17% gain in the S&P 500 index (SPX).
Despite the slight decrease in stock value and mixed future expectations, Walmart’s performance in the third quarter demonstrates its resilience and ability to adapt to changing market dynamics.
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