Walmart Forecasts Robust Growth, Raises Fiscal 2025 Sales Outlook as Inflation Softens

The company anticipates that its annual consolidated net sales will exhibit growth at the upper end or slightly above its previous forecast range of 3% to 4%.

Walmart, the prominent U.S. retail corporation, has revised its sales and profit projections for the fiscal year 2025, anticipating a favorable impact from a reduction in inflation. This adjustment is expected to drive increased demand for essential items and contribute to the recovery of discretionary product sales, particularly in electronics. As a result of this outlook, the company's shares experienced a notable increase of 6% during premarket trading.

The company, headquartered in Bentonville, Arkansas, now anticipates that its annual consolidated net sales will exhibit growth at the upper end or slightly above its previous forecast range of 3% to 4%. Furthermore, it foresees its adjusted profit per share to be positioned at the upper end or slightly surpassing its prior estimated range of $2.23 to $2.37. These updates were communicated by Walmart on Thursday, signaling its optimistic outlook for the fiscal year.

During the first quarter ending on April 30, Walmart reported a notable increase in total U.S. comparable sales, excluding fuel, by 3.9%. This growth was supported by a similar rise in the average number of transactions, reflecting sustained consumer activity. Additionally, volume sales experienced growth within the quarter, indicating a positive trend for the company. Analysts, on average, had anticipated a U.S. comparable sales growth of 3.15%, making Walmart's performance exceed market expectations.

The recent surge in Walmart's stock price has propelled its valuation to over 25 times the expected earnings, a significant uptick from its historical average valuation of approximately 20 over the past decade. This suggests a strong anticipation of growth in the upcoming quarters, as indicated by data from the London Stock Exchange Group (LSEG).

Put simply, Walmart's upward adjustment of its fiscal 2025 sales and profit forecast reflects its confidence in the market, driven by expectations of alleviated inflation and subsequent increased consumer demand. This positive outlook is supported by its strong performance in the first quarter, surpassing analyst projections, and is reflected in the notable increase in its stock valuation.