Walmart estimates a lower-than-expected decline in annual earnings less than a month ago. The decline in fuel prices and the large discounts to eliminate excess goods contributed to improving the situation. In premarket Walmart is up 3.8% to $ 137.6.
Walmart now expects adjusted EPS for fiscal year 2023 to drop from 9% to 11%, compared with the previous forecast of an 11% to 13% decline. In July, Walmart had cut its earnings forecast and warned consumers were withdrawing discretionary purchases at a much faster rate than feared as very high inflation was hampering their spending power.
The Walmart’s strategy was to drastically reduce the prices of items such as clothing to try to reduce inventory worth the more than $ 61 billion it was on at the end of the first quarter. Inventories fell to $ 59.92 billion at the end of the second quarter ended July 31, still 25% above last year’s levels.
Walmart’s total revenue increased 8.4% to $ 152.86 billion in Q2 on the back of demand for food and other essential items. Numbers just above the consensus estimates they were of $ 150.81 billion.