Consumer Discretionary

Walmart (WMT) remains a healthy, effectively managed company with “solid growth” and “strong flow through,” RBC Capital Markets said in a note, raising its Q2 earnings estimate to $0.64 per share from $0.62 and increasing its price target $70 from $62. “A growing profit contribution from advertising and membership income supports a re-rating,” RBC said, maintaining its outperform rating. Walmart’s Q1 results had “few holes to poke,” RBC said, noting that management had shared that sales were consistent when normalized for unusual calendar and weather events. Also important is that customers’ grocery purchases increasingly include lower-priced proprietary Walmart brands, giving the retailer “more leverage in supplier negotiations,” the analysts said.

Walmart is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. The retailer’s net income hit $5.1 billion in the fiscal first quarter, or 63 cents a share, versus a FactSet consensus estimate of 52 cents a share. Revenue grew 6% to $161.51 billion, compared with analyst expectations of $159.6 billion. Walmart expects second-quarter adjusted EPS of 62 cents to 65 cents, compared with the FactSet consensus of 64 cents. It expects full-year adjusted EPS to be at the high-end or slightly above original guidance of $2.23 to $2.37, with net sales at the high end or slightly above the previously expected range of a 3% to 4% increase. Dow Jones & Co. owns Factiva.

We lift our 12-month target to $72 from $68, 27.2x our FY 26 (Jan.) EPS of $2.65 (up from $2.61; FY 25’s up to $2.46 from $2.42) vs. the 24x historical average. FQ1 (Apr-Q) adj-EPS of $0.60 (+22% Y/Y) beat the $0.52 consensus, with Walmart U.S. comp sales up 3.8% (+3.8% transactions; 0% average ticket) vs. 3.5% consensus. Adj-operating income grew 14% Y/Y, with margin +30 bps Y/Y to 4.4%. While WMT raised its FY 25 guidance, we think it is still conservative given the strength and momentum in all three segments (i.e., Walmart U.S.; International; Sam’s Club). We keep a Buy, as we see market share gains continuing, not just in grocery, but also in general merchandise due to WMT’s rapidly growing online marketplace. We believe WMT has plenty of long-term growth in its higher-margin services streams (e.g., advertising, fulfillment services, data analytics, subscriptions), which, in addition to changes

Consumers are responding to Walmart’s lower prices with strong sell-throughs, CEO Doug McMillon says on a call with analysts following the retail giant’s 1Q results. The company’s making progress lowering prices, which McMillon says are important to its customer and membership base. Walmart recently announced the biggest release of a private food brand in 20 years, with 70% of the products priced under $5. “Our combination of everyday low prices plus a large number of rollbacks is resonating.” Shares rise 5.9% to $63.33.

Walmart is seeing gains from its advertising business and expanding its data analysts and insights product, Walmart Luminate, into Mexico and Canada. The retail giant’s advertising business was up 24% in the latest quarter, with U.S. ad sales reflecting more than 50% growth from marketplace sellers while overall active advertiser counts increasing nearly 19%. Sam’s ad business now has 30% more active advertisers from last year. Advertising, membership, marketplace and fulfillment and data analytics are higher-margin growth drivers, and they are leading to corresponding improvements in Walmart’s business mix, Finance Chief John D. Rainey says on a call. Shares rise 6% to $63.40.

The following is a summary of the Walmart Inc. (WMT) Q1 2025 Earnings Call Transcript: Financial Performance: Walmart Inc. had a strong Q1 with a 5.7% increase in sales growth and a 12.9% increase in adjusted operating profit in constant currency. All operating segments saw increased growth driven primarily by growth in units sold and transaction counts. Inventory management improved, resulting in a decrease of 2.7% globally. Operational income for the quarter improved by about $900 million. Gross margins are improving due to reduced markdowns and higher contributions from newer businesses. The international operations performed well with a top-line growth of 10.7% and operating income growth of 27%. Business Progress: The company has made notable improvements in customer experience. Store remodels, improvements in curbside pick-up, and delivery services have been carried out. Walmart has launched a new private food brand, Better Goods, in the U.S. The number of marketplace sellers

Walmart’s share gains continued to be mainly driven by upper-income households in the 1Q, the retail giant says. U.S. comparable stores sales excluding fuel rose 3.8% in the period. Still, its average ticket remained flat. Overall in the quarter, Walmart saw strength across all operating segments, with global ecommerce sales growing 21% as a result of its in store-fulfilled pickup and delivery. Shares rise 5.5% to $63.14 in premarket trading.

Walmart (WMT) on Thursday recorded better-than-expected fiscal first-quarter results buoyed by gains across all operating segments, prompting the retail giant to raise its full-year guidance. The company now anticipates to be at the high end or “slightly” above its original fiscal 2025 outlook for per-share adjusted earnings and sales growth. In February, Walmart issued a forecast for adjusted EPS to be between $2.23 and $2.37, with sales to increase by 3% to 4% at constant currency. The consensus on Capital IQ is for normalized EPS of $2.37 and revenue of $670.35 billion for the fiscal year. “We’ll revisit our full-year guidance as we exit (the second quarter),” Chief Financial Officer Rainey said on an earnings call, according to a Capital IQ transcript. “This is more aligned with our historic cadence of updates and consistent with the philosophy we have as a management team to recognize early momentum, but to also