Top line
Walmart shares rose to a record high on Thursday after the nation’s largest brick-and-mortar retailer’s latest earnings report impressed Wall Street and provided cause for optimism as the U.S. economy grapples with wavering public perception.
Walmart stock is on pace for its best day in more than four years.
Key data
Walmart shares rose more than 8% to about $74.50 in premarket trading, well above the previous all-time high of $71.33 reached last month and approaching their best day since March 2020.
The boost came after the company reported results for the three-month period ended July 31 that beat estimates for revenue ($169.3 billion in revenue versus analyst estimates of $168.6 billion) and earnings ($0.67 in earnings per share versus estimates of $0.65).
These were record highs for Walmart’s sales and profits, and the company indicated that it expects the good times to continue. It raised its forecast for full-year sales growth to 3.75 percent to 4.75 percent from 3 percent to 4 percent and forecast earnings growth of 6 percent to 9 percent.
Walmart has “not observed a growing deterioration in consumer health,” John David Rainey, the company’s chief financial officer, told the Wall Street Journal. This is a positive signal for the overall economy, as fears of a possible economic downturn have been mounting in recent weeks.
The rise in Walmart shares boosted the broader market. Futures for the Dow Jones Industrial Average and the S&P 500 each rose nearly 1 percent and are expected to open at their highest levels in two weeks.
Key quote
“The only places anyone is shopping right now are Amazon, Walmart and Costco,” Michael Baker, an analyst at DA Davidson, told CNN, adding that “value has become more important to consumers.” That statement helps explain the continued slump in stocks of retailers tied to companies that offer more everyday products. Shares of athletic goods giants Lululemon and Nike have each lost more than 25% since the beginning of the year.
Large number
Nearly $50 billion. That’s how much market capitalization Walmart is expected to add when trading begins at 9:30 a.m. EDT. That’s about three-quarters of rival Target’s total market value.
