(Reuters) – Retail giant Walmart on Thursday raised its annual sales and profit forecasts for the second straight quarter, signaling a successful start to the holiday season as more Americans shop at its stores. stores groceries, clothing but also Christmas gifts, attracted by cheaper prices.
Walmart has leveraged its size and scale to keep prices low despite inflation, cementing its position of choice among low-income households while attracting higher-income consumers who seek more competitive prices.
With better stock levels, the American giant has grabbed market share from its competitors in recent months.
Walmart now expects earnings per share for fiscal 2024 between $6.40 and $6.48 (5.90 to 5.97 euros) compared to its previous forecast of $6.36 to $6.46.
Full-year comparable sales are expected to increase 5% to 5.5% versus 4% to 4.5% in the previous estimate.
“We are excited about the early start to the holiday season,” said Walmart CEO Doug McMillon.
The focus on everyday products has helped the badge guard against the slowdown in non-essential spending.
More than half of the products Walmart sells are food, drinks and other essentials, unlike rival Target.
Its profit margin also increased by 32 points in the third quarter, as the company carried out fewer clearances than last year, and thanks to reduced costs in the supply chain.
The retailer’s optimistic forecast echoes that of Target, which on Wednesday projected better-than-estimate fourth-quarter profit thanks to tighter inventory controls.
Walmart has also worked to offer Christmas products in a wide price range to attract consumers hit by inflation.
Comparable sales, that is, sales at Walmart stores in the United States open at least one year, increased 4.9% during the third quarter ended October 31, excluding fuel, exceeding few estimates (4.77%). Walmart’s online sales also increased by 15%.
The company reported adjusted earnings of $1.53 per share in the third quarter. Analysts on average expected earnings of $1.52 per share.
(Siddharth Cavale in New York and Deborah Sophia in Bangalore; by Zhifan Liu, editing by Kate Entringer)
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