Walmart shares gained 5% in premarket trading on Tuesday after the retail giant forecast a smaller fall in profit than analysts expected. Despite recent price hikes amid the United States inflation struggles, Walmarts’ discounts on clothing and electronics have assisted to attract U.S. shoppers in search of affordable products.
The company’s total third-quarter revenue rose 8.7% to $152.81 billion, beating analysts’ estimates of $147.75 billion. The retailer also announced a $20 billion share buyback plan.
Following its better-than-expected earnings report, Walmart adjusted its expected fiscal 2023 adjusted earnings per share. The company expects a fall from 6% to 7%, compared to a previously estimated decline of 9% to 11%.
Adjusted earnings per share for the fourth quarter of 2022 are expected to decline from 3% to 5%, compared to experts’ expectations of a 4.5% fall. Walmart projects a 3% rise in U.S. same-store sales for the period excluding fuel, however, this estimate is more conservative than analysts’ expectations of a 3.4% increase.
While Walmart’s decision to heavily discount products lowered its gross profit margins, this move has helped the company to grab market share from other struggling retailers.