Walmart (WMT) is still recession-resistant, posting a solid quarter and improved outlook for the rest of the year. Q2 EPS was $0.86 vs. an $0.84 consensus, and revenue also beat expectations, clocking in at $102.7 billion vs. a 101.69 billion consensus.
The solid performance was driven by grocery and pharmacy price cuts and improved displays of consumer electronics, which drew tax rebate spending.
Walmart raised guidance as well. It now sees annual EPS between $3.43 and $3.50, up from an earlier view of $3.30 to $3.43, and Q3 EPS between $0.73 and $0.76. Consensus for the year is $3.49 and for Q3 is $0.76.
“The combination of solid operating performance and improved capital efficiency gave us record earnings this quarter and nearly $5 billion in free cash flow in the first half of the fiscal year,” said Lee Scott, Wal-Mart Stores, Inc. president and chief executive officer. “Our underlying business remains sound as our associates deliver on Wal-Mart’s mission to save people money so they can live better.”
Now the question is what happens to Walmart earnings and sales without tax rebate checks? Will investors expect too much?
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