Thank God It’s Friday

Inflation, supply chain struggles, and the general state of the economy have many companies struggling in earnings szn… but not Walmart. 😤 The mega retailer thrived in its Q4 earnings report yesterday, sending $WMT up almost 4% over the last 24 hours. Here are the numbers:

Revenue: $152.87 billion, +0.5% YoY (compared to estimates of $151.53 billion)
Adj. Earnings per share: $1.53 (compared to estimates of $1.50/share)
Guidance: +4% increase in total sales, +3% increase in same-store sales   

Walmart’s EPS and revenue beat was accompanied by raised guidance for FY 2023 as the company reassured investors that supply chain disruptions and COVID-related costs would not significantly hinder financials. The retailer saw a boost to its sales in Q4 thanks to its stores remaining stocked and greater cost-awareness among consumers in the current economy. Walmart’s transaction volume actually increased +3.1% for the quarter.

Walmart CEO Doug McMillon shared: “During periods of inflation like this, middle-income families, lower-middle-income families, even wealthier families become more price-sensitive and that’s to our advantage.” 

Walmart’s strength benefited from a general boost to consumer spending over the last few months — the Commerce Dept. saw a 3.8% month-over-month increase in consumer spending in January. Additionally, Walmart finally unveiled its behemoth of an advertising business. The retailer showed that its advertising segment raked in $2.1 billion in ad revenue throughout 2021, demonstrating a startling +240% growth on a 2-year basis. This figure shows Walmart’s budding strength in demand-side marketing. 

Walmart’s strength (and its new investments/ventures) points to the company’s ability to take inflation and macroeconomic troubles in stride. 💪 $WMT closed down 0.64% today.

The numbers are out, and to nobody’s surprise, the housing market is still chaos. Due to a record-low supply of homes combined with rising mortgage rates, homebuyers were frantic in the first part of 2022. 🏡

In January, existing home sales shot +6.7% throughout the country, and the median existing-home price skyrocketed +15.4% YoY — the median home price is now $350,300. According to the WSJ, realtors say that most homes are selling within days of listing across the U.S. 

Analysts expect the short home supply to continue throughout 2022, and potentially over the course of the next couple of years. Just 860,000 homes were listed for sale last month, which is a 2.3% decrease from the month prior and a 16.5% decrease from January 2021. Robert Frick, a corporate economist at Navy Federal Credit Union, said “It will take years to build our way out of the supply-and-demand imbalance that should keep home prices rising strongly this year despite higher rates.” 

According to Freddie Mac, the average 30-year fixed-rate mortgage has climbed to 3.92%, its highest since May 2019. 📈