Walmart and Target Beat Wall Street Estimates in Q3 of 2023
20 Novembro 2023 - 7:33AM
Finscreener.org
Retail giants
Walmart (NYSE:WMT) and Target
(NYSE:TGT)
announced their quarterly results last week. On Thursday, Walmart
reported fiscal third-quarter earnings that surpassed Wall
StreetU+02019s expectations, with a rise in sales. However, the
retail giant expressed a cautious outlook as it observed a decline
in consumer spending towards the end of the period.
The companyU+02019s stock fell by
over 8% on Thursday, following a record high the previous day. With
the crucial holiday shopping season ahead, Walmart provided a
year-end forecast slightly below expectations.
Walmart now predicts its adjusted
earnings per share for the year to be between $6.40 and $6.48,
slightly lower than the $6.48 anticipated by analysts but still an
improvement over its earlier projections. The company also expects
a 5% to 5.5% increase in consolidated net sales, an upward revision
from its previous estimate.
The trend of inflation easing,
and even deflation in some categories, could benefit
WalmartU+02019s customers but potentially impact the
companyU+02019s sales. CEO Doug McMillon noted on the earnings call
that while prices for some grocery items remain high, they have
decreased for dairy, eggs, chicken, and seafood. He also mentioned
that customers could expect price relief when shopping for holiday
gifts.
The continuing drop in general
merchandise prices may signal a shift for Walmart. The company has
seen sales increases partly because customers have been paying more
for various items during the inflationary period.
How did Walmart perform in Q3?
WalmartU+02019s financial results
for the quarter ending October 31 surpassed analyst expectations
based on consensus estimates from LSEG. HereU+02019s a breakdown of
their reported figures versus what was anticipated:
Adjusted Earnings Per Share:
$1.53, slightly above the expected $1.52.
Revenue: $160.80 billion,
exceeding the forecast of $159.72 billion.
In this fiscal third quarter,
Walmart experienced a notable increase in net income, recording
$453 million, or 17 cents per share. This is a significant
turnaround from the previous yearU+02019s quarter, where they faced
a loss of $1.8 billion, or 66 cents per share, mainly due to a
settlement related to opioid litigation.
The companyU+02019s revenue, up
from $152.81 billion in the same quarter last year, was bolstered
by its robust grocery segment, which has performed well amidst high
inflation and a rise in digital sales.
Walmart U.S. saw a 4.9% increase
in comparable sales, a key retail indicator also known as
same-store sales. Additionally, Sam’s Club reported a
year-over-year rise of 3.8% in its comparable sales.
Target exceeds analyst estimates
On Wednesday,
Target reported
quarterly results that surpassed Wall StreetU+02019s sales
forecasts and significantly exceeded earnings expectations, thanks
to strong sales in frequent purchase categories like food and
beauty, which offset softer overall customer spending.
For the fiscal third quarter
ending October 28, hereU+02019s how TargetU+02019s performance
measured up against Wall StreetU+02019s expectations, based on
LSEGU+02019s analyst survey:
- Earnings per share: $2.10 vs. $1.48
expected
- Revenue: $25.4 billion vs. $25.24 billion
expected
Following the announcement,
TargetU+02019s shares closed nearly 18% higher, reflecting a
recovery from the stockU+02019s decline earlier this
year.
However, the retail giant
continues to face persistent challenges. Consumers are primarily
focusing on essential purchases, are increasingly price-conscious,
and are delaying purchases, such as waiting for colder weather
before buying items like jeans or sweatshirts, as explained by CEO
Brian Cornell in a media call.
Target saw a decline in
comparable sales for the second consecutive quarter. This key
retail indicator, also known as same-store sales, adjusts for the
effects of store openings, closures, and renovations.
Michael Fiddelke, TargetU+02019s
Chief Financial Officer, emphasized on the call that the company is
intently working on boosting customer traffic and sales into
positive figures.
Despite this focus,
TargetU+02019s leadership team indicated a turnaround might not
occur this year, even with the expected influx of holiday
shoppers.
Target (NYSE:TGT)
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