Walmart predicts that 65% of its stores will be serviced by automation by 2026.
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Walmart
reaffirmed its first-quarter and current fiscal-year guidance on Tuesday, meaning America’s largest retailer hasn’t noticed a drastic change in consumer attitudes.
Walmart
(ticker: WMT)is often considered a litmus test for consumer health, given its sheer size and scale, so any indications that the company was projecting a softer year would have been viewed by investors as a sign that consumers may be pulling back faster than expected.
Shares of Walmart were little changed in after-hours trading on Tuesday, off 0.8% at $146, while the
S&P 500
was down 0.6%.
The guidance update was issued as part of the company’s two-day meeting with investors.
Heading into the event, analysts seemed to agree that no news would be good news for Walmart. The company had already given softer-than-expected guidance in its recent earnings report, coming off the heels of a volatile 2022 during which the company was forced to lower guidance ahead of its annual shareholder meeting.
“Overall, we expect an upbeat tone from management on the underlying drivers of the business and believe the company is likely to reiterate fiscal 2023 guidance and long-term targets for 4%-plus sales growth and operating income growth ahead of sales growth,” wrote Oppenheimer analyst Rupesh Parikh ahead of the meeting.
On Tuesday, Walmart did just that. The company reiterated guidance, as well as its commitment to grow sales by 4%, and operating income by more than that, over the next three to five years.
Walmart will hold a live stream starting at 8 a.m. Eastern Time on Wednesday, where it will outline how the company expects to achieve these growth targets. The company highlighted three main drivers of growth in the release on Tuesday: diversifying its earnings streams, scaling high-return investments, and growing out its online and physical business model.
Walmart also plans to invest heavily on its supply chain, and foresees that by fiscal 2026, roughly 65% of stores will be serviced by automation, and 55% of fulfillment center volumes will move through automated facilities.
Write to Sabrina Escobar at [email protected]
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