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Financial Results Beat Expectations
Walmart once again showed its dominance by posting revenue of $169.6 billion for Q3 FY 2025 (the three-month period ending October 25, 2024), a 5.5% year-over-year increase. Even more impressive, the company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $16.3 billion, which was 66.2% higher than anticipated. Surprisingly, earnings per share (EPS) rose to $0.58, 8.8% above expectations.* This growth is especially remarkable given the stagnating store count. Instead of expansion, the company has focused on improving the efficiency and performance of existing operations. The results also reflect the growing popularity of online shopping, with the company’s e-commerce segment growing by 27% globally. Walmart successfully navigated more frugal consumer behaviour by concentrating on sales of groceries and household goods.
Ready for the Holiday Rush
Thanks to these impressive results, Walmart has raised its revenue forecast for the third time in a row. The company revised its expected revenue growth for fiscal year 2025 (the twelve-month period ending January 31, 2025) to 4.8% to 5.1%, compared to the previous range of 3.75% to 4.75%. The EPS estimate also increased to $2.42 to $2.47. Total revenue for this period is expected to reach $642.6 billion, with an adjusted operating profit of $27.1 billion. While inflation growth has slowed, Walmart is preparing for the upcoming holiday season by reducing the fee for its Walmart Plus membership, which allows customers to receive unlimited same-day free delivery. This is part of a broader strategy that helps it remain competitive as other retailers also battle for customers’ attention during holiday shopping.
Stock Price at All-Time High
Following the raised forecasts, Walmart shares traded at a record high of $88.27 on the New York Stock Exchange (NYSE). Despite ongoing economic uncertainties, especially as retailers face declining consumer spending, Walmart's stock has shown consistent performance, gaining about 63% so far this year.* The company maintains investor favour through constant innovation and its ability to adapt to current market trends and customer preferences.
Source: Investing.com*
Trump's Policy Could Drive Price Increases
Walmart executives, in addition to releasing the financial results, warned that if there were an excessive increase in the U.S. import tariffs, as indicated by the White House's future leadership during the election campaign, retailer could raise prices. Such a move could negatively impact consumer behaviour, as people are still feeling the effects of high inflation. Walmart is not the only company concerned about this policy. According to data from LSEG (London Stock Exchange), nearly 200 companies from the S&P 1500 Composite index have discussed the possibility of implementing these tariffs during their earning calls or investor conferences since September 2024. Many of these companies are highly dependent on foreign suppliers. Prices for products sourced from China, such as clothing, toys, appliances, and furniture, could particularly rise. [1]
Conclusion
Walmart demonstrates that the combination of traditional retail with e-commerce innovations is delivering results. Strong revenue growth, improved margins, and successful adaptation to digital trends enable the company to not only prepare for the crucial holiday shopping period but also maintain its leadership position. Investors may view this performance as a sign of stability and growth potential, especially at a time when the retail segment is facing challenges. Walmart appears poised for more successful quarters – the question remains whether it can sustain this pace amid potential political or macroeconomic obstacles. [2]
David Matulay, analyst of InvestingFox
* Data relating to the past are not a guarantee of future returns.
[1], [2] Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements are not guarantees of future performance. Forward-looking statements inherently involve risk and uncertainty because they relate to future events and circumstances that cannot be predicted and actual developments and results may differ materially from those expressed or implied in any forward-looking statements.
Warning! This marketing material is not and must not be construed as investment advice. Data relating to the past is not a guarantee of future returns. Investing in a foreign currency can affect returns due to fluctuations. All securities transactions can lead to both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements are not guarantees of future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.
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