Walmart Inc. Update for the Second Quarter and Fiscal Year 2023

Bentonville, Ark. 25 July 2022 Walmart Corporation (NYSE:WMT) updated the business today and revised its earnings forecast for the second quarter and full year, primarily due to pricing actions to improve Walmart and Sam’s Club inventory levels in the United States and its sales mix.

Walmart’s US sales, excluding fuel, are expected to be around 6% for the second quarter. This is higher than previously expected with a heavier mix of food and consumables, negatively impacting the gross margin ratio. Food price inflation is double and higher than at the end of the first quarter. This affects customers’ ability to spend on general merchandise categories and requires more check-outs to move through inventory, especially clothing. During the quarter, the company made progress in reducing inventory, managing pricing to reflect certain supply chain costs and inflation, and reducing warehousing costs associated with shipping container backlogs. Customers are choosing Walmart to save money during this inflationary period, and this is reflected in the company’s continued market gains in groceries.

“Increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress in clearing hawkish categories, clothing at Walmart US requires more sale dollars. We now anticipate more pressure on general merchandise in the back half; however, we are encouraged by the start that we’re seeing about school supplies at Walmart USA.” President and CEO.

Routing updates

Based on the current environment and the company’s outlook for the remainder of the year, it provides the following updates to its guidance.

  • Consolidated net sales growth for the second quarter and full year is expected to be around 7.5% and 4.5%, respectively. Except for abstractions1Full-year consolidated net sales growth is expected to be around 5.5%.
  • Net sales include currency headwinds of about $1 billion in the second quarter. Based on current exchange rates, the company expects headwinds of $1.8 billion in the second half of the year.
  • The company maintains its forecast for US Walmart sales growth, excluding fuel, of about 3% in the back half of the year.
  • Operating income for the second quarter and full year2.3 It is expected to decrease by 13-14% and 11-13%, respectively. Except for abstractions1Operating income for the full year2 It is expected to decrease by 10 to 12%.
  • Adjusted earnings per share4 For the second quarter and the full year it is expected to decline around 8 to 9% and 11 to 13%, respectively. Except for abstractions1adjusted earnings per share4 For the full year it is expected to decline by 10 to 12%.

The company’s updated guidance includes the effects of the following separate items in the second quarter:

  • Proceeds from Walmart Chile’s insurance settlement, which positively impacts operating income of $173 million and adjusted earnings per share of $0.05
  • Proprietary dividend income received by the Company in connection with its equity investment in JD.com, which positively affects other gains and losses of $182 million and adjusted earnings per share of $0.05
  • The company will provide more details on business performance and its outlook for the year when it announces second-quarter results on August 4. 16, 2022.

About Walmart
Walmart Corporation (NYSE: WMT) helps people around the world save money and live better — anytime, anywhere — in retail, online, and through their mobile devices. Each week, nearly 230 million customers and members visit more than 10,500 stores and numerous e-commerce sites under 46 banners in 24 countries. With fiscal year 2022 revenue of $573 billion, Walmart employs approximately 2.3 million employees worldwide. Walmart continues to lead the way in sustainability, corporate philanthropy, and employment opportunities. Additional information about Walmart can be found by visiting Corporate.walmart.comon Facebook at facebook.com/walmart And on Twitter at twitter.com/walmart.

1The company completed the sale of its UK and Japanese operations in the first quarter of the 2022 financial year.
2Growth rates primarily reflect an adjusted prior year result, which excludes business restructuring charges in the fourth quarter of fiscal 2022.
3Based on current foreign exchange rates, operating income includes negative impacts estimated at approximately $60 million and $100 million for the second quarter and fiscal year 2023, respectively.
4The growth rates primarily reflect an adjusted prior year result, which excludes gains and losses from the company’s equity investments, business restructuring fees, loss on debt amortization recorded during the third quarter of fiscal 2022 and the incremental loss from the sale of the company’s operations. in the United Kingdom and Japan during the first quarter of fiscal year 2022.


forward-looking statements

This release contains data relating to Walmart management’s expectations and guidance or to consolidated net sales performance, comparable sales performance for the US Walmart segment, consolidated operating income performance, adjusted earnings per share, and the effects of foreign exchange rates, in each case, for the three-month period ending 31 July 2022 and the full fiscal year ended January 31, 2023. Walmart believes that such statements may be considered “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Act”) and are intended to enjoy safe harbor protections for data Forward-looking statements set forth in law in addition to the protections afforded by other federal securities laws. The assumptions on which such forward-looking statements are based are also forward-looking statements. These forward-looking statements are not statements of historical facts, but rather express our estimates or expectations of economic performance or consolidated results of operations, one of our sectors or businesses, or results of operations for future periods or at future dates, events or developments. that may occur in the future or discuss our plans, goals or objectives.

Our actual results may differ materially from those expressed or implied in any of these forward-looking statements as a result of changes in circumstances, assumptions that have not materialized, or risks, uncertainties and other factors including: the impact of the COVID-19 pandemic on our business and the global economy; economic markets, capital markets and business conditions; trends and events around the world and in the markets in which we operate; fluctuations in currency exchange rates, changes in market interest rates and market wage levels; Changes in the size of different markets, including e-commerce markets; unemployment levels; inflation or deflation, in general and especially product categories; Consumer confidence, disposable income, credit availability, spending levels, shopping patterns, debt levels and demand for certain goods; the effectiveness of the implementation and operation of our strategies, plans, programs and initiatives; unexpected changes in our goals and plans; the impact of acquisitions, investments, divestitures and other strategic decisions; Our ability to successfully integrate acquired business; changes in the trading prices of certain equity investments that we hold; Competitor initiatives, competitors’ entry and expansion into our markets and competitive pressures; customer traffic and average transactions in our stores, clubs and on our e-commerce websites; The mix of merchandise we sell, the cost of merchandise we sell and the shrinkage we experience; our gross profit margins; The financial performance of Walmart and each of its segments, including the amounts of our cash flows over various periods; The amount of our net sales and operating expenses denominated in US dollars and various foreign currencies; commodity prices, gasoline and diesel fuel prices; supply chain disruptions and interruptions in seasonal purchasing patterns; Availability of goods from suppliers and cost of goods purchased from suppliers; Our ability to respond to changing trends in consumer shopping habits; consumer acceptance and response to our stores, clubs, e-commerce platforms, software, merchandise offerings and delivery methods; Cyber ​​security events affecting us and related costs and their impact on business; developments, consequences and costs incurred in legal or regulatory actions to which we are a party or subject to, and the responsibilities, obligations and expenses, if any, that we may incur in connection therewith; Injury and accident costs and insurance costs; Our workforce turnover and labor costs, including healthcare costs and other benefits; our effective tax rate and the factors that affect our effective tax rate, including assessments of certain contingent tax possibilities, assessment allowances, changes in law, management audit findings, and the impact of separate items and profit mixes between the United States and Walmart’s international operations; changes in tax and labor laws and regulations and other existing laws and regulations and changes in tax rates including the enactment of laws and the adoption and interpretation of administrative rules and regulations; imposition of new taxes on imports, new tariffs and changes in existing tariff rates; the imposition of new trade restrictions and changes to existing trade restrictions; or create and modify new government policies, programs, initiatives, and procedures in markets in which Walmart accreditation operates and elsewhere, and procedures relating to such policies, programs, and initiatives; changes in accounting estimates or judgments; level of public assistance payments; natural disasters, changes in climate, geopolitical events, global health epidemics or epidemics and catastrophic events; and changes to generally accepted accounting principles in the United States.

Our most recent annual report on Form 10-K and subsequent quarterly report on Form 10-Q filed with the Securities and Exchange Commission discuss risks and other factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in the release and comments. related management. We encourage you to carefully consider all risks, uncertainties and factors identified above or discussed in such reports in evaluating the forward-looking statements in this release. Walmart cannot assure you that results are reflected in or implied by any forward-looking statement that will be achieved or, even if substantially realized, that such results will have foreseeable or foreseeable consequences and effects on or on our operations or financial performance. The forward-looking statements made today are as of the date of this release. Walmart does not undertake to update these forward-looking statements to reflect subsequent events or circumstances.

Leave a Comment