(Reuters) -Walmart Inc forecast full-year profit and U.S. sales above market expectations on Thursday, signaling a steady demand at stores even as supply-chain issues and rampant cost inflation pressure the retail giant’s margins.
Shares of the world’s largest retailer and a consumer bellwether rose 2.7% in premarket trading.
While Walmart has increased prices on some products, it still undercuts rivals due to its scale and negotiating power with suppliers, helping it gain market share in key areas of business such as groceries.
However, the company’s focus on its “Everyday Low Price” strategy has pushed up costs as it spends heavily to get around supply-chain challenges by speeding up shipments and chartering its own cargo ships.
The company said it expects fiscal 2023 adjusted earnings per share to increase 5% to 6%, while analysts had expected a 4.4% increase, according to Refinitiv data.
Walmart expects fiscal 2023 U.S. comparable sales to increase slightly more than 3%, while analysts were expecting a 2.8% increase.
Net revenue in Walmart’s fourth quarter showed a surprise 0.5% increase to $152.87 billion, beating analysts’ average estimate of $151.53 billion, or a 0.4% fall.
Sales at its U.S. stores open at least for a year rose 5.6%, excluding fuel, in line with analysts’ estimates, helped by a 3.1% rise in transactions.
However, online sales growth in the United States was just 1%, compared with a 69% surge a year earlier and 8% in the previous quarter. Analysts at Tesley Advisory Group had expected a 10% quarterly rise.
The company also raised its annual dividend by 2% to $2.24 per share.
(Reporting by Uday Sampath and Siddharth Cavale in Bengaluru and Arriana McLymore in New York; Editing by Arun Koyyur)
