Walmart Stock Thriving with Over 15% Year-to-Date Gain

Walmart Stock

Walmart Inc. (NYSE:WMT) is enjoying robust performance driven by its relentless commitment to enhancing omnichannel capabilities and delivering an exceptional customer experience. These efforts have consistently boosted the retail giant’s comparable sales, setting it on a path of steady growth.

Walmart Stock Performance

Walmart stock has seen its stock price surge by 15.8% year-to-date, outperforming the industry’s growth of 14.5%. Over the past 30 days, the Consensus Estimate for the current fiscal-year earnings per share (EPS) has increased by a penny to $6.43.

Impressive Comparable Sales & Positive Outlook

Walmart’s robust e-commerce business, coupled with effective in-store operations, has been a key driver of the company’s comp sales growth. Walmart has dedicated itself to store renovations, expanding its product offerings, and implementing digital and in-store enhancements. In the second quarter of fiscal 2024, Walmart successfully revamped 165 stores across the United States.

One of Walmart’s strengths lies in its strategic pricing approach, which has been pivotal in attracting and retaining customers. In the second quarter, U.S. comparable sales, excluding fuel, showed an impressive improvement of 6.4%. This growth was notably driven by outstanding performance in the grocery and health & wellness segments.

Additionally, e-commerce contributed significantly to comp sales, with a 230 basis point (bps) boost. Sam’s Club also experienced healthy growth, with comp sales (excluding fuel) increasing by 5.5%. Comp sales displayed strength across various categories, with notable contributions from the food, consumables, and healthcare sectors.

For fiscal 2024, Walmart anticipates consolidated net sales growth of 4-4.5% at constant currency (cc). Management expects consolidated operating income to increase approximately 7-7.5% at cc, including a 30-bps positive impact of LIFO. The company envisions an adjusted EPS ranging from $6.36 to $6.46.

Key Growth Drivers

Walmart’s e-commerce operations are on an expansive trajectory, with e-commerce net sales accounting for 15% of the company’s total net sales in the second quarter. The company has been actively pursuing various e-commerce initiatives, including acquisitions, partnerships, and enhancements to its delivery and payment systems.

Walmart is also making significant strides in revolutionizing its supply chain, expanding capacity, and exploring new avenues such as Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+, Spark Delivery, Marketplace, and Walmart Fulfillment Services. In the second quarter of fiscal 2024, global e-commerce sales surged by an impressive 24%, bolstered by its omnichannel capabilities, particularly in pickup and delivery services.

In the United States, e-commerce sales experienced a remarkable 24% increase, primarily driven by the exceptional performance of pickup and delivery services, along with effective advertising campaigns. Meanwhile, the International segment witnessed a robust 26% surge in e-commerce sales, largely attributed to store-fulfilled orders. At Sam’s Club, e-commerce sales grew by 18% due to the strong performance of curbside pickup services.

Walmart has been making substantial investments to strengthen its delivery capabilities, evident in its strategic initiatives, such as partnering with Salesforce, expanding the InHome delivery service, investments in DroneUp, and launching the Walmart+ membership program. Walmart introduced Express Delivery in April 2021 and established partnerships with Point Pickup, Skipcart, AxleHire, and Roadie in January 2019.

The acquisition of Parcel in September 2017 was another strategic move to enhance its delivery services. Walmart’s store and curbside pickup options further enhance customer convenience. As of the second quarter of fiscal 2024, Walmart U.S. boasted nearly 4,600 pickup locations and more than 4,000 same-day delivery stores. As of January 31, 2023, the company had over 8,100 pickup and nearly 7,000 delivery locations worldwide.

Walmart has solidified its position in the retail industry through its unwavering commitment to refining omnichannel strategies and elevating customer experiences. HSBC has identified Walmart as its top choice in the retail sector. The company has initiated coverage of Walmart stock with a “buy” rating and set a price target of $200.

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.