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Sales at Walmart’s U.S. stores open at least a year rose 6.4%, excluding fuel, in the three months ended July 31, beating estimates of a 4.44% increase, according to Refinitiv data.
“Food is a strength, but we’re also encouraged by our results in general merchandise versus our expectations when we started the quarter,” Walmart CEO Doug McMillon said in a statement.
Walmart is also benefiting from lower supply-chain costs and fewer discounts that were previously put in place to cut down excess inventory.
“We’re in good shape with inventory, and we like our position for the back half of the year,” McMillon said.
Smaller rival Target on Wednesday beat quarterly profit estimates, benefiting from leaner inventory.
Walmart said gross margin rate in the second quarter rose 50 basis points, compared to an 18 basis point decline in the first quarter.
The retail behemoth now expects fiscal 2024 earnings to be in the range of $6.36 per share to $6.46 per share, compared to the prior forecast of $6.10 to $6.20. Analysts on average were estimating $6.28 per share, according to Refinitiv IBES data.
The company also forecast net sales to increase about 4% to 4.5%, compared to an about 3.5% rise expected previously.
In contrast, Target cut its full-year forecasts.
Walmart’s operating income rose 6.7% to $7.32 billion in the quarter, while it reported adjusted earnings per share of $1.84.
