Walmart increased its sales forecast. What does this say about consumer sentiment?

Walmart, the largest US retailer, raised its annual revenue forecast for the second consecutive quarter. Walmart's results are considered an indicator of the overall health of the American consumer, and the positive dynamics reduces concerns about the slowdown in consumer activity amid the ambiguous situation in the labor market and inflation. In addition, the retailer announced its decision to change the exchange where its securities are traded.

Walmart raised its outlook for 2025 - the company now expects revenue growth of 4.8-5.1% versus the 3.75%-4.75% estimate it presented in August. In addition, the company also improved its adjusted earnings per share expectations to $2.58-2.63 instead of the previous $2.52-2.62.

Walmart attracts shoppers of all income levels, so its results are closely watched by investors: they reflect the overall state of the consumer in the U.S. and show how Donald Trump's duties affect prices, notes Bloomberg. The forecast upgrade suggests the world's largest retailer remains popular with price-sensitive shoppers, though the company faces rising costs and expects additional pressure in the coming months, the publication adds.

"We are closely monitoring how consumers are behaving, but are generally confident in the state of the business," Chief Financial Officer John David Rainey said as quoted by Bloomberg.

Some of Walmart's competitors (e.g., Target and Home Depot) have already warned that shoppers are becoming more cautious, but the retailer's fresh data, on the contrary, reduce fears of a slowdown in consumer activity amid a cooling labor market, layoffs and rising prices, emphasizes Bloomberg. According to Rainey, in general, the spending of Americans remains stable: a noticeable slowdown is observed only among households with low incomes. Middle- and upper-income shoppers are not reducing spending - moreover, the most affluent have increased spending in certain categories.

Walmart's revenue in the third quarter amounted to $179.5 billion against Wall Street forecasts of $177.43 billion, and adjusted earnings per share - 62 cents against the expected 60, CNBC reports with reference to LSEG data. The retailer managed to beat analysts' forecasts thanks to double-digit revenue growth in the e-commerce segment and an influx of shoppers of all income levels. One of the key factors was rapid delivery growth.

In the U.S., prices in Walmart stores increased by only 1% over the last quarter. This indicates that the retailer has managed to contain the inflationary pressure associated with duties, Bloomberg writes. The company takes part of the increased costs on itself, partially shifts them to customers and in parallel works with suppliers to keep prices as low as possible.

Walmart also announced that it is moving its stock listing to the Nasdaq exchange instead of the NYSE, where it will begin trading on Dec. 9. This will be the company's largest departure in NYSE history, Bloomberg noted. The ticker will remain the same - WMT.

In trading on November 20, Walmart shares soared more than 6% to $107.37, which was their highest in almost a month. Since the beginning of the year, the market value of the company has grown by 18%. For comparison: the main U.S. stock index S&P 500 for the same period added about 15%.

95% of analysts tracking the company's stock dynamics advise investors to buy them (Buy and Overweight estimates), according to MarketWatch. The consensus target price of $115.5 implies Walmart's securities will rise another 15% from the last closing price.

This article was AI-translated and verified by a human editor