About 10 days before Black Friday — one of the most anticipated shopping days for merchandisers — big-box retailer Walmart reported better-than-expected revenue and profit.
And good news for consumers: the company plans to set prices for Thanksgiving staples at the same level as in 2021.
For the third fiscal quarter, Walmart generated more than $152 billion in total revenue, eclipsing the nearly $148 billion expected by Wall Street analysts. The company also reported adjusted earnings per share of $1.50 for the quarter, versus $1.32 expected by analysts.
Walmart saw growth in grocery sales this quarter as it rolled out various offers to appeal to budget-conscious consumers.
“With our Deals for Days events in the United States and a Thanksgiving meal that will cost the same as last year, we’re here to help make this time affordable and special for families around the world. “Walmart CEO Doug McMillon said in a press release.
Shoppers will be able to take advantage of holiday meal savings through Dec. 26, according to Walmart’s website.
In addition to increased grocery sales, Walmart also benefited from a strong back-to-school shopping season in the United States and global sales events in countries like India and China, McMillon said. on a call with investors.
In the second quarter, Walmart’s profits also beat Wall Street analysts’ expectations as inflation-ridden shoppers sought affordable staples like groceries rather than discretionary goods like clothing.
What this means for investors
Shares of Walmart surged on Tuesday, following the company’s earnings call.
If you invested $1,000 in Walmart a year ago, you’d see a slight return on your investment and you’d have about $1,024 as of Nov. 15, according to CNBC’s calculations. These calculations were made after markets opened and are based on a stock price of $149.
If you invested $1,000 in Walmart five years ago, your investment was worth about $1,755 as of Nov. 15, according to CNBC’s calculations.
And if you had invested $1,000 in Walmart ten years ago, your investment would have more than doubled in value and would have been worth around $2,377 as of Nov. 15, according to CNBC calculations.
Walmart should continue to perform well over the holiday season as the company’s focus on low prices should continue to appeal to price-conscious consumers, Deutsche Bank analyst Krisztina Katai predicted ahead of the report on the results.
However, Walmart’s performance could be affected by various factors, such as changes in consumer shopping habits or further increases in labor costs, Katai adds.
Investors should always do their homework
With this in mind, it is always important to remember that a stock’s past performance should not be used as an indicator of its future performance.
Given the unpredictability of the stock market, a passive investment strategy tends to make sense for most investors, rather than investing in individual stocks.
Investing in a stock index, like the S&P 500, can be a great way to start. Since the S&P 500 tracks the performance of stocks of large, publicly traded U.S. companies, investing in an S&P 500 index fund or an exchange-traded fund (ETF) can be a great way to gain exposure to a number of well-known companies.
As of Nov. 15, the S&P 500 was down about 15% from 12 months ago, according to CNBC’s calculations. However, the index has increased by around 55% since 2017 and around 196% since 2012.
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