Walmart (WMT, Financial) is intensifying its discount strategies to boost consumer demand and capture a larger market share in response to ongoing economic volatility. The retail giant is implementing "manager's special" signs to emphasize key price reductions and align its pricing with competitors, according to a recent report.
This move comes as Walmart prioritizes maintaining low prices to counteract decreased consumer spending and potential cost hikes due to tariffs. The company is focused on sustaining its sales targets for the current year by making its products more appealing to cost-conscious shoppers.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 39 analysts, the average target price for Walmart Inc (WMT, Financial) is $106.96 with a high estimate of $120.00 and a low estimate of $85.34. The average target implies an upside of 11.50% from the current price of $95.93. More detailed estimate data can be found on the Walmart Inc (WMT) Forecast page.
Based on the consensus recommendation from 45 brokerage firms, Walmart Inc's (WMT, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Walmart Inc (WMT, Financial) in one year is $61.47, suggesting a downside of 35.92% from the current price of $95.925. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Walmart Inc (WMT) Summary page.
WMT Key Business Developments
Release Date: February 20, 2025
- Sales Growth: 5.2% for the quarter; 5.6% for the full year in constant currency.
- Adjusted Operating Income: Increased 9.4% for the quarter; nearly 10% for the full year in constant currency.
- Adjusted EPS: Up 13% for the full year.
- Inventory Levels: Up 2.8% at the end of the fiscal year.
- Global E-commerce Growth: 16% for the quarter; penetration now 18% of sales.
- Walmart US Comp Sales: Increased 4.6%, with e-commerce sales growth of 20%.
- Sam's Club US Comp Sales: Increased 6.8%, with e-commerce growth of 24%.
- Gross Margin Expansion: 53 basis points for the quarter.
- Global Advertising Revenue: Grew 27% to about $4.4 billion for the year.
- Global Membership Income: Grew 21% to about $3.8 billion for the year.
- Return on Investment: Improved approximately 50 basis points to 15.5%.
- CapEx: Totaled $23.8 billion for the year.
- Dividend Increase: Raised by 13%, the largest increase in over a decade.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Walmart Inc (WMT, Financial) reported a strong quarter with sales growth of 5.2% and adjusted operating income up 9.4% in constant currency.
- The company continues to gain market share across countries and income levels, with transaction counts and unit volumes up across markets.
- Walmart Inc (WMT) is growing profit faster than sales, with higher margin businesses like membership, marketplace, and advertising contributing significantly.
- The company is making significant progress in e-commerce, with a 16% growth in the fourth quarter and improved e-commerce economics, particularly in Walmart US.
- Walmart Inc (WMT) is leveraging technology and AI to improve operations, with initiatives like the AI agent Wally and new coding tools saving millions of developer hours.
Negative Points
- Currency headwinds reduced reported sales by over $2 billion, impacting growth by 120 basis points.
- The company faces ongoing margin pressure from merchandise category mix, with a shift towards grocery and health and wellness.
- SG&A expenses deleveraged 46 basis points in the quarter, driven by tech investments, increased variable pay, and higher marketing and utilities costs.
- The acquisition of VIZIO is expected to have a 150 basis point negative impact on operating income growth due to integration investments and transition costs.
- Walmart Inc (WMT) anticipates continued uncertainties related to consumer behavior and global economic and geopolitical conditions, which could impact future performance.
