- Strong demand across income levels boosts Walmart’s revenue
- Walmart’s e-commerce sales jump 25%, aiding overall growth
- Second-quarter profit below expectations, first miss in 3 years
- CEO warns tariff costs increasing as inventory replenished
Walmart (WMT.N), opens new tab on Thursday raised its fiscal year sales and profit forecast, driven by strong demand from shoppers across all income levels, who have turned to the world’s largest retailer as they worry about rising costs.
Its shares, however, plunged 5% in early trading as its second-quarter profit was lower than expected, registering Walmart’s first earnings miss in more than three years. Walmart’s 12-month forward price-to-earnings ratio of 36.64 is nearly three times higher than Target’s, indicating Walmart investors’ high growth expectations.
Walmart’s results show it has continued to benefit from growing price sensitivity among Americans, earning revenue of $177.4 billion in the second quarter. Analysts on average were expecting $176.16 billion, according to data compiled by LSEG.
The Bentonville, Arkansas-based chain got a boost from a sharper online strategy as more customers relied on home deliveries. Its global e-commerce sales jumped 25% during the second quarter, and Walmart said one-third of deliveries from stores took three hours or less.
Consumer sentiment has weakened due to fears of higher inflation due to tariffs, hitting the bottom lines of some retail chains, but Walmart’s sales have remained resilient.