Dow Jones is a big-box retailer Walmart (WMT) beat estimates for Q3 results early Thursday but Walmart stock fell premarket on its soft outlook. Competitor target (DGT) reported dramatic Q3 earnings early Wednesday. TGT stock was the best performer on the S&P 500 on Wednesday and posted its best gain in four years.
Retailers are always releasing deals for the crucial holiday shopping season. After making big gains earlier in the year, the industry largely buckled in Q2 on softer consumer spending. Losses from organized crime and retail theft reduce revenue.
But with the holidays set to juice sales, Adobe predicts that online spending during Cyber Week 2023 — which includes Thanksgiving, Black Friday and Cyber Monday — will rise to $37.2 billion, driven by a 4.8% increase in Cyber Monday sales of $12 billion. Since last year. Online sales for Black Friday alone are projected to rise 5.7% over 2022 to $9.6 billion.
Walmart’s earnings growth declined for the second quarter in a row, increasing 2% to $1.53 per share on 5.2% total revenue growth to $160.8 billion.
Analysts polled by FactSet expected earnings of $1.52 per share on revenue of $159.65 billion.
Net sales of customer purchases rose 5.3% to $159.44 billion, while membership revenue and other income rose 1.6% to $1.37 billion.
Comparable sales excluding fuel across all U.S. locations increased 4.7%. Same-store sales at Walmart US stores rose 4.9%, down from 8.2% growth last year. Sam’s Club’s comparable sales rose 3.8%, down from a 10% gain in 2022.
Walmart CEO Doug McMillon noted strong revenue growth across all company segments in the quarter. Thanksgiving food prices will also be lower this year than last year. “We are excited to start the holiday season early,” McMillan wrote.
Walmart guided for fiscal 2024 consolidated net sales growth of 5% to 5.5% with adjusted earnings of between $6.40 and $6.48 per share. Dow Jones reported full-year 2023 earnings of $605.9 billion on net sales of $6.29 per share.
FactSet analysts expect FY2024 revenue to rise 5.3% to $638.16 billion on net sales at $6.50 a share.
Walmart revenue growth slows to 4% for Q2 2024 results after two quarters of accelerated, double-digit gains
WMT stock fell more than 7% in premarket Thursday and gained 1.3% on Wednesday. After climbing above the 164.33 buy point on November 1, the stock is trading in a buy zone for the cup-with-handle base. If the premarket move continues, it will trigger the 7% sell rule.
Shares were up 19.7% this year through Wednesday’s close.
Target reported a 36.4% increase in earnings to $2.10 per share and a 4.2% decline in total revenue to $25.4 billion. Earnings beat FactSet earnings estimates of $1.47 per share. The results beat the $25.3 billion revenue estimate.
The results marked Target’s second revenue increase after six consecutive quarters of declines.
Company-wide comparable sales decreased 4.9%, driven by a 6% decline in comparable digital sales. Same-store sales fell 4.6%.
Total sales — Target’s total from customer purchases — fell 4.3% to $25 billion.
CEO Brian Cornell noted in the release that despite a “very challenging external environment,” Target was able to deliver results. Sales were in line with the company’s expectations, though revenue came in higher than its own forecasts due to efficiency and inventory management efforts.
For Q4, Target expects comparable sales in a “broad range” around a mid-single-digit decline. The company reported earnings per share in the range of $1.90 to $2.60 for the quarter.
FactSet analysts expected Q4 revenue to rise 18% to $2.23 per share, on a 1% decline in earnings to $31.69 billion.
Target shares fell 2% early Thursday and fell 17.9% on Wednesday. Shares are locked in a 24-month low, but have made at least a potential bottom in early October.
The advance marked Target’s best gain since shares surged 20.4% on Aug. 21, 2019.
TGT stock has fallen 12.5% this year through Wednesday’s close.
You can follow Harrison Miller on X/Twitter for more stock news and updates @IBD_Harrison
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