Walmart WMT earnings release. “U.S. retailers worry about slowing consumption at the end of the year”

Walmart WMT earnings release. “U.S. retailers worry about slowing consumption at the end of the year”
Large U.S. retailers are warning of a slowdown in consumption for the year-end shopping season. Walmart and Target have shown higher sales than experts’ expectations in their earnings announcements, but they are expressing concern due to a sharp drop in stock prices and signs that consumers have begun to consume less. Economic indicators are also showing support for this slowdown in consumption, and consumers’ desire to spend seems to be declining due to high interest rates and economic pressure.

Q3 FY24
EPS of $1.53 (estimated earnings of $1.51) above
Revenue topped $160.8B (expected $159.3B)

Year-on-year comparison

• +5% increase in total sales
• +130% increase in operating profit
• Operating margin of 4%

From guidance, we raised our 24-year sales and operating profit for the remaining fiscal year of the quarter.

The ratio of operating expenses to sales has remained similar since the third quarter of fiscal year 23. Since the sales are so large, even if there is a 1% difference, it is a huge amount. If you apply last year’s same-term ratio as it is, you saved more than 3.7 trillion won.

Operating profit seems to have improved tremendously, but it was so low in the same period last year.

Although buybacks have continued to decline in the last five quarters, the remaining approval amount is $18B (about 23 trillion won).

The same-store sales growth in the U.S. is the lowest in the last five quarters at +4.9%, but the proportion of online sales (lower figure) has been increasing little by little. E-commerce sales in the U.S. increased by +24%.

International Revenue rose +10.8%, its highest in five quarters. E-commerce sales, on the other hand, fell by -3%, as Flipkart’s sale event last year was in the third quarter, while this year it was in the fourth quarter.

The growth of the Chinese business is still going on. Same-store sales increased +18.6%, total sales increased +25.3%, and e-commerce increased +38%

When comparing operating profit by division, the change in international is the largest at +29.7% increase.