IEDI

Walmart Raises Its Fiscal 2025 Outlook

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Image Source: Walmart By Brian Nelson, CFA On August 15, Walmart (WMT) reported better than expected second quarter results with both revenue and non-GAAP earnings per share coming in higher than the consensus forecast. Consolidated revenue advanced 4.8% in the quarter led by Walmart U.S. comp sales up 4.2% and Sam’s Club comp sales up 5.2%, both measures excluding fuel. The company’s consolidated gross margin expanded 43 basis points thanks to strength in Walmart U.S. and Walmart International. Walmart’s adjusted operating income increased 7.2% in the quarter “due to higher gross margins and growth in membership income.” Global ecommerce and global advertising advanced 21% and 26%, respectively, in the period. Adjusted earnings per share increased 9.8%, to $0.67 per share, … Read more

Walmart Warns: “Prices Are Still High and There Is Considerable Pressure on the Consumer”

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  Image Source: Mike Mozart By Brian Nelson, CFA As we wrote in “The Fed ‘Can’t Stop, Won’t Stop” in early January, the trade-down trends that we’re seeing in big box retail and with groceries, more generally, are interesting. Inflation started to accelerate with food-at-home prices moving aggressively higher in early 2022, and consumers have been trading down to better value. It probably wasn’t until egg prices soared, however — driven in part by a shortage of egg laying chickens (not just inflationary pressures) – that tipped everyday consumers to budget more cautiously, and the largest big box retailer in Walmart (WMT) is seeing this impact first-hand. Here’s what’s happening on the ground, per Walmart’s CEO Doug McMillon on the … Read more

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong

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Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe By Brian Nelson, CFA Tesla (TSLA) CEO Elon Musk and Apple (AAPL) CEO Tim Cook seemingly have worked out a plan for Apple to keep advertising on the Twitter platform after what looked to be a temporary pause by the iPhone maker. Though the news is immaterial to our thesis on Apple in any respect, it was good to see the two tech giants work whatever differences they had out. Certainly, a fallout between Musk and Cook would not be a good thing for the tech sector and innovation, more broadly, as the two wield large influences across Silicon … Read more

Target’s Holiday Outlook Sends Mixed Messages; Big Sales Data Week Ahead

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Image Source: Valuentum “Nearly all of the slowdown was driven by our discretionary categories, Apparel, Home and Hardlines, as our guests became increasingly cautious in their spending in those categories at both Target and throughout the industry more broadly. So far in the month of November, trends have been largely consistent with what we were seeing at the end of October, in terms of our comp trends, the mix of sales between frequency and discretionary businesses and the focus on promotions by our guests.” – Target’s 3Q Conference Call By Brian Nelson, CFA After Walmart (WMT) reported its third-quarter earnings November 15, “Walmart Is Back on Track; Markets Looking Healthier,” we thought things were looking a bit better across the … Read more

Target Posts Stellar Comparable Store Growth, Digital Investments Lead the Way

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Image Source: Target Corporation – May 2013 IR Presentation By Callum Turcan Elevated demand for consumers staples products and rebounding consumer discretionary sales helped Target Corporation (TGT) report record comparable store sales growth in the second quarter of fiscal 2020 (period ended August 1, 2020), which were up 24.3% year-over-year. Digital comparable sales were up a whopping 195% year-over-year as same-day delivery services grew by 273%, with Target citing strength at its curbside pickup, order online/pickup in-store and home delivery options. Please note Target generates virtually all of its revenues in the US. Market Share Gains and Digital Investments The uplift in US consumer spending power from the Coronavirus Aid, Relief, and Economic Security Act (‘CARES Act’), particularly the direct … Read more