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Walmart share price: rally set to continue

Walmart share price: rally set to continue

Walmart’s share price is tipped to open higher this afternoon when trading gets underway in New York. 

Impressive Q1 numbers

The retailer posted its first-quarter numbers, and the figures were impressive due to the surge in demand from customers amid the pandemic. Same-store sales in the US increased by 10%, while the US ecommerce division saw sales surge by 74%. Traders are likely to react well to the online sales figures as a strong e-commence presence make a firm stand out in the current environment.

Revenue for the three-month period increased by 8.6% to $134.6 billion. Adjusted earnings per share were $1.18. The impact from the Covid-19 crisis hasn’t all been positive for the group, as costs associated with the pandemic were in the region of $900 million. Higher wages, sanitation and safety expenses are examples of extra costs because of the health emergency. However, Walmart has proved that it has been able to thrive in difficult conditions, and so confidence in the firm is likely to be remain high.

Walmart share price boost

The Walmart share price received a boost in mid-February when the company posted its fourth-quarter numbers, despite the results missing forecasts across all the major metrics. EPS came in at $1.38, undershooting the $1.43 forecast. Same-store sales in the US increased by 1.9%, but the consensus estimate was for growth of 2.3%. Revenue for the three-month period was $141.67 billion, which narrowly missed expectations.

The CEO, Doug McMillion, confirmed that Q4 ‘wasn’t out best’. The three-month period included Christmas, so it was a little disappointing the company didn’t have a strong performance over the crucial spending period. Target and Kohl’s found themselves in a similar position, as they didn’t have a great quarter either. In contrast, Amazon saw record levels of shipments as its investment in same day and one-day delivery proved to be extremely popular.

Walmart’s share price saw a surge in volatility in March, and the stock was caught up in the market-wide sell-off, but was then jolted higher as traders poured funds in retail stocks. At the height of the health crisis, some people were panic buying, so that helped Walmart’s share price. Amid the stockpiling by consumers, the company revealed plans to hire 150,000 hourly workers in a bid to keep up with the demand.

Walmart’s share price hit a record high last month, and even though it has cooled a little, the bullish trend is still in place.       


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