SRB/MNE
ALWalmart and Alibaba – Retail Giants' Performance
16.11.2023
Earnings season in the United States is a period where a large number of publicly traded US companies report their quarterly earnings. In this article, we will focus on two retail giants that posted their earnings today. We advise you to keep an eye on them because they might impact your trading plans or inspire you to start trading.
Let’s take a look.
Walmart (WMT)
Walmart is a multinational retail corporation known for its chain of hypermarkets, discount department stores, and grocery stores. This company reported its earnings today before the stock market is about to open.
Wall Street expected that this retailer, according to consensus estimates from LSEG, formerly known as Refinitiv to report the following results:
- Earnings per share: $1.52 expected
- Revenue: $159.72 billion expected
Walmart is experiencing increased investor confidence as it heads into the holiday season. Despite more selective consumer behavior, Walmart's focus on its e-commerce expansion, including third-party marketplace growth and revenue streams from advertising and Walmart+ memberships, has boosted its stock. Shares of the company touched an all-time high Wednesday dating to when Walmart debuted on the New York Stock Exchange in August 1972. The stock closed at nearly $170 on Wednesday, up about 19% for the year. The company's emphasis on grocery sales and competitive pricing has allowed it to outperform Target, with analysts highlighting Walmart's strength in carrying essential items and maintaining a reputation for value.
So what exactly happened?
WMT Q report results
Walmart reported a 5% increase in sales during the fiscal third quarter, driven by increased grocery shopping and the continued growth of its e-commerce operations, contributing to the big-box retailer's performance - as expected.
Here’s what Walmart reported for the three months ended Oct. 31 compared with what analysts were expecting, according to consensus estimates from LSEG, formerly known as Refinitiv:
So what exactly happened?
WMT Q report results
Walmart reported a 5% increase in sales during the fiscal third quarter, driven by increased grocery shopping and the continued growth of its e-commerce operations, contributing to the big-box retailer's performance - as expected.
Here’s what Walmart reported for the three months ended Oct. 31 compared with what analysts were expecting, according to consensus estimates from LSEG, formerly known as Refinitiv:
- Earnings per share: $1.53 adjusted vs. $1.52 expected
- Revenue: $160.80 billion vs. $159.72 billion expected
In the fiscal third quarter, Walmart saw a significant increase in net income to $453 million, or 17 cents per share, compared to a loss of $1.8 billion, or 66 cents per share, in the same period last year, which was impacted by legal charges related to opioids. Revenue also grew from $152.81 billion in the previous year. In the U.S., both customer visits and spending rose, with transactions up 3.4% and average purchases growing by 1.5%. E-commerce sales surged by 24% in the U.S. and 15% globally compared to the previous year.
Alibaba (BABA)
Alibaba is a Chinese multinational technology conglomerate specializing in e-commerce, retail, internet, and technology. This Chinese giant reported its earnings alongside Walmart at the same time, today. Traders were keen to see the numbers as the Chinese economy is known for its recent struggles. Growing economic headwinds have prompted officials in Beijing to take measures to boost economic growth.
Analysts expectations:
Alibaba (BABA)
Alibaba is a Chinese multinational technology conglomerate specializing in e-commerce, retail, internet, and technology. This Chinese giant reported its earnings alongside Walmart at the same time, today. Traders were keen to see the numbers as the Chinese economy is known for its recent struggles. Growing economic headwinds have prompted officials in Beijing to take measures to boost economic growth.
Analysts expectations:
- Earnings per share: $2.11 expected
- Revenue: $30 billion expected
How is the company performing?
Alibaba has been making efforts to entice shoppers away from its primary competitors, by implementing tactics like providing incentives to users on its Taobao and Tmall platforms. (Taobao and Tmall are e-commerce platforms owned by Alibaba Group. Taobao is made up of virtual stores owned by individuals or companies, while Tmall is a platform for local Chinese and international businesses to sell brand-name goods to consumers).
BABA stock has seen a recent decline over the last three months, with a slight uptick of nearly 2% in November compared to the broader S&P 500's 7% increase. China's CSI 300 index has only risen by 0.27% this month. However, with negative sentiment surrounding China's market and prospects, coupled with expectations of slower growth for Alibaba, investors are facing challenges in boosting the stock's performance.
BABA Q report results
The company missed analysts and market expectations.
Here’s how Alibaba did in the September quarter, compared with Refinitiv consensus estimates:
Alibaba has been making efforts to entice shoppers away from its primary competitors, by implementing tactics like providing incentives to users on its Taobao and Tmall platforms. (Taobao and Tmall are e-commerce platforms owned by Alibaba Group. Taobao is made up of virtual stores owned by individuals or companies, while Tmall is a platform for local Chinese and international businesses to sell brand-name goods to consumers).
BABA stock has seen a recent decline over the last three months, with a slight uptick of nearly 2% in November compared to the broader S&P 500's 7% increase. China's CSI 300 index has only risen by 0.27% this month. However, with negative sentiment surrounding China's market and prospects, coupled with expectations of slower growth for Alibaba, investors are facing challenges in boosting the stock's performance.
BABA Q report results
The company missed analysts and market expectations.
Here’s how Alibaba did in the September quarter, compared with Refinitiv consensus estimates:
- Net income attributable to ordinary shareholders: 27.7 billion yuan ($3.8 billion) versus 29.7 billion yuan expected.
- Revenue: 224.79 billion yuan ($31 billion) versus 224.3 billion yuan expected.
Its U.S. shares fell over 8% in pre-market trading following the news.
What does this mean for traders?
It means that traders can profit in times when companies are top performers, and also in times when they are underperforming. With CFD trading, you traders can capitalize on both positive and negative market reactions following companies meeting or missing analysts' expectations. When a company surpasses predictions, its stock may surge, offering CFD traders the chance to profit by opening a BUY position and speculating on further price increases. If a company falls short of expectations, the stock might plummet, enabling CFD traders to profit from opening SELL positions and betting on the stock's decline.
Conclusion
The results serve as an indication of the health of the Chinese and American consumers. Also, they often include management discussions and analyses about the company's operations and future outlook. Overall, the Q report season is essential for understanding individual company performance, making investment decisions, and assessing broader market trends and economic health. Anyone can use the market movements to their advantage.
What does this mean for traders?
It means that traders can profit in times when companies are top performers, and also in times when they are underperforming. With CFD trading, you traders can capitalize on both positive and negative market reactions following companies meeting or missing analysts' expectations. When a company surpasses predictions, its stock may surge, offering CFD traders the chance to profit by opening a BUY position and speculating on further price increases. If a company falls short of expectations, the stock might plummet, enabling CFD traders to profit from opening SELL positions and betting on the stock's decline.
Conclusion
The results serve as an indication of the health of the Chinese and American consumers. Also, they often include management discussions and analyses about the company's operations and future outlook. Overall, the Q report season is essential for understanding individual company performance, making investment decisions, and assessing broader market trends and economic health. Anyone can use the market movements to their advantage.
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