Why Walmart Stock Popped Today

The retail giant delivered another strong earnings report.

Shares of Walmart (WMT 6.21%) were soaring today after the world’s largest retailer flexed its muscles once again in its quarterly earnings report. Walmart beat estimates on the top and bottom lines and said that it outperformed in all three of its operating segments.

As a result, the stock was up 7% as of 10:14 a.m. ET.

A Walmart sign lit up at night

Image source: Walmart.

Walmart shines again

The retail giant reported strong results across the board in the first quarter, continuing its momentum from 2023.

Overall revenue was up 6% to $161.5 billion, which included a 1% benefit from leap day, and beat estimates at $159.5 billion. Comparable sales rose 3.8% at the core Walmart U.S. segment, lapping a 7.4% increase from the quarter a year ago, showing solid growth even as food inflation moderated. That drove a 10% increase in operating income to $5.5 billion.

In the international segment, operating income jumped 31.7% to $1.5 billion, and Sam’s Club also continues to execute well with operating income up 34.3% to $0.6 billion.

Gross margin also rose 42 basis points, driven by growth in all segments, and it controlled inventory, bringing the key line item down 4.2%. Its global advertising business grew 24%, and e-commerce jumped 21%.

On the bottom line, adjusted earnings per share jumped from $0.49 to $0.60, which topped the analyst consensus at $0.52.

CEO Doug McMillon said:

Our team delivered a great quarter. Around the world our goal is simple — we’re focused on saving our customers both money and time. It’s inspiring to see how our associates are simultaneously executing the fundamentals and innovating to make shopping with us more enjoyable and convenient.

Can Walmart keep delivering?

In a difficult time for much of the retail sector, Walmart has thrived due to its economies of scale, reputation for low prices, strength in consumer staples like groceries, and growth from new businesses like advertising and e-commerce.

Looking ahead to the second quarter, Walmart said it expects revenue growth of 3.5% to 4.5%, operating income of 3% to 4.5%, and adjusted earnings per share of $0.62 to $0.65, which compares to estimates at $0.64.

Walmart still has a lot of growth opportunities in India, e-commerce, and advertising, and it’s executing as well as it has in a long time. The stock looks like a good bet to keep moving higher.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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