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What’s happening: Shares of Walmart gained on Thursday, after the company reported results for its first quarter.
What happened: The big-box retailer reported stronger-than-expected earnings for its first quarter on Thursday.
Walmart also boosted its outlook for the full year on expectations of a slowdown in inflation providing a boost to sales of groceries and non-essential products.
How were the results: The Bentonville, Arkansas-based company reported a single-digit increase in sales for its first quarter ended April 30.
Why it matters: Although inflation rate in the US eased in April, there were signs of cooling in domestic demand. However, Walmart’s projections for the full year sent the stock to a record high of $64.22 during Thursday’s session.
Walmart reported a 3.8% surge in total US comparable sales, excluding fuel, on higher transactions and unit volumes. Online sales in the US gained 22% in the quarter.
At Sam’s Club, same-store sales, excluding fuel, grew by 4.4% year-over-year. Global ecommerce sales climbed 21%, while global advertising business grew 24%.
The company’s gross margins widened by 42 basis points (bps), driven by Walmart US.
Management guided to adjusted earnings of 62 to 65 cents per share for the second quarter on consolidated sales growth of 3.5% to 4.5%.
Walmart projected adjusted earnings at the high end or slightly above its prior forecast of $2.23 to $2.37 per share for fiscal 2025. It also expects 2025 consolidated net sales (at constant currency) to increase at the high end or slightly above its previous outlook of 3% to 4% growth.
How shares responded: Walmart’s shares jumped 7% to close at $64.01 on Thursday, after hitting an all-time high earlier in the session. The stock has added 24% over the past six months.
What to watch: Investors will continue monitoring the overall inflation levels in the US, which is expected to significantly boost consumer spending and impact the company’s results ahead.
Context: The EUR/USD forex pair edged lower on Thursday, after earlier surging to a two-month high.
Details: The euro recorded gains in early trading on Thursday, hovering near the major $1.09 resistance level, amid an increase in investor risk appetite.
The EUR/USD forex pair had gained around 0.6% on Wednesday, rising for the third straight session on the release of consumer prices data from the US. The latest data releases on producer and consumer prices from the US fuelled prospects of two rate cuts by the Federal Reserve in September and November.
Meanwhile, traders widely expect the European Central Bank to cut its benchmark interest rate in June.
On the economic data front, Italy recorded a trade surplus of €4.341 billion in March. Although this was higher than the surplus of €3.327 billion posted in the year-ago month, it missed market estimates of €4.77 billion. Italy’s annual inflation rate eased to 0.8% in April, from March’s reading of 1.2%, and came in below the preliminary reading of 0.9%.
Some strength in the greenback exerted pressure on the EUR/USD forex pair on Thursday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 104.46 during Thursday’s session.
The EUR/USD slipped more than 0.1% to 1.0869 on Thursday, after earlier hitting its strongest level since March 21.
European stocks fell on Thursday, retreating from their multi-decade high levels recorded in the previous session. The STOXX Europe 600 Index shed 0.21% to close at 523.62.
What to watch: Investors await the release of inflation data from the Eurozone today. The annual inflation rate in the Eurozone is expected to remain at 2.4% in April, while the harmonized index of consumer prices is projected to increase by 0.6% in the month, compared to a 0.8% rise in March.
Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.10%, 0.21% and 0.21%, respectively.
Denmark announced plans to send a new military aid package worth around DKK 5.6 billion ($815.47 million) to Ukraine. The news sent the safe-haven US dollar index higher in forex trading this morning.
China’s retail sales grew by 2.3% year-over-year in April, missing market expectations of 3.8% and exerted pressure on the CNY/USD forex pair.
Singapore’s non-oil domestic exports contracted by 9.3% year-over-year in April. This being the third straight month of decline sent the SGD/USD pair lower in forex trading this morning.
South Korea’s unemployment rate came in steady at 2.8% in April. However, the number of unemployed persons rising 10% year-over-year to 885,000 exerted pressure on the KRW/USD forex pair.
New Zealand’s producer input prices rose by 0.7% in the first quarter, versus a 0.9% increase in the prior quarter, sending the NZD/USD pair lower in forex trading this morning.
France’s unemployment rate, India’s value of loans, deposit growth and foreign exchange reserves, Canada’s new housing price index and foreign investment in Canadian securities, Russia’s GDP growth rate and consumer price index, US Baker Hughes crude oil rigs and Baker Hughes total rigs, China’s foreign direct investment, as well as Argentina’s leading economic index.
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