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Walmart Beats on Q4 Earnings, Guides Lower: ETFs in Focus
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Before the opening bell yesterday, Walmart (WMT - Free Report) reported fourth-quarter fiscal 2023 results, wherein it surpassed both earnings and revenue estimates but issued a weaker-than-expected outlook for the full year.
Shares of WMT recovered all the losses made during the session following the earnings announcement and jumped 0.6% at the close. This has put ETFs having the highest allocation to the world's largest brick-and-mortar retailers in focus. These include Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report) , iShares Evolved U.S. Discretionary Spending ETF (IEDI - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , and VanEck Vectors Retail ETF (RTH - Free Report) .
Walmart Earnings in Focus
Earnings per share came in at $1.71, outpacing the Zacks Consensus Estimate of $1.52 and improving 11.8% from the year-ago earnings. Revenues rose 7.3% year over year to $164 billion and topped the consensus mark of $159.7 billion. U.S. comparable sales grew 8.3%. The strong results were attributable to strength in food categories, private brand sales and higher ticket and store transactions (read: Retail ETFs in Focus As Big-Box Q4 Earnings Unfold).
The mega retailer offered downbeat guidance for the fiscal year 2024 and warned that tight spending by consumers could put pressure on profit margins. It expects earnings per share in the range of $5.90-$6.05 for fiscal 2024, much lower than the Zacks Consensus Estimate of $6.49. Sales are expected to grow 2.5-3% and U.S. comp sales, excluding fuel, will rise 2-2.5% for the fiscal year.
For fiscal-quarter fiscal 2024, earnings per share are expected to be in the range of $1.25-1.30 while sales will likely grow 4.5-5%.
Walmart boosted its annual dividend by $0.04 to $2.28 per share, marking the 50th consecutive year of dividend increase.
Below, we have detailed the ETFs:
Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report)
Qraft AI-Enhanced U.S. Large Cap Momentum ETF is an actively-managed exchange-traded fund that aims to provide investors with long-term capital appreciation by utilizing a proprietary artificial intelligence system to select large-capitalization U.S. stocks to be held in the portfolio. It holds 50 stocks in its basket, with Walmart occupying the top spot at 7.95%. Consumer cyclicals and energy are the top two sectors with one-fourth allocation each followed by technology, industrials and consumer non-cyclicals.
Qraft AI-Enhanced U.S. Large Cap Momentum ETF has accumulated $12 million in its asset base while trading in a volume of 1,000 shares a day on average. It charges 75 bps in annual fees.
iShares Evolved U.S. Discretionary Spending ETF (IEDI - Free Report)
iShares Evolved U.S. Discretionary Spending ETF is an actively managed ETF that employs data science techniques to identify companies with exposure to the discretionary spending sector. It follows the Cboe BZX, formerly known as BATS, and holds 164 stocks in its basket. Walmart occupies the fourth position with a 7.5% share. IEDI is dominated by retailing with nearly half of the portfolio, while food & staples retailing and consumer services round off the next two with double-digit exposure each.
iShares Evolved U.S. Discretionary Spending ETF has accumulated $13.6 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 4,000 shares a day, on average.
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF tracks the MSCI USA IMI Consumer Staples Index, holding 109 stocks in its basket. Of these, Walmart takes the fifth spot with a 7.3% share in FSTA (see: all Consumer Staples ETFs here).
Fidelity MSCI Consumer Staples Index ETF has amassed $1.1 billion in its asset base while trading in a good volume of around 125,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 101 stocks in its basket, with Walmart occupying the fifth position, having a 7.3% allocation. Vanguard Consumer Staples ETF is widely spread across soft drinks, household products, packaged foods & meats, and hypermarkets & supercenters that make up for a double-digit allocation each.
Vanguard Consumer Staples ETF manages a $6.6 billion asset base and charges a fee of 10 bps per year. VDC trades in a good volume of around 134,000 shares per day, on average, and has a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the third spot with a 6.2% share (read: ETF Areas to Win on Upbeat January Retail Sales).
VanEck Vectors Retail ETF has amassed $153.9 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 7,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 with a Medium risk outlook.
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Walmart Beats on Q4 Earnings, Guides Lower: ETFs in Focus
Before the opening bell yesterday, Walmart (WMT - Free Report) reported fourth-quarter fiscal 2023 results, wherein it surpassed both earnings and revenue estimates but issued a weaker-than-expected outlook for the full year.
Shares of WMT recovered all the losses made during the session following the earnings announcement and jumped 0.6% at the close. This has put ETFs having the highest allocation to the world's largest brick-and-mortar retailers in focus. These include Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report) , iShares Evolved U.S. Discretionary Spending ETF (IEDI - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , and VanEck Vectors Retail ETF (RTH - Free Report) .
Walmart Earnings in Focus
Earnings per share came in at $1.71, outpacing the Zacks Consensus Estimate of $1.52 and improving 11.8% from the year-ago earnings. Revenues rose 7.3% year over year to $164 billion and topped the consensus mark of $159.7 billion. U.S. comparable sales grew 8.3%. The strong results were attributable to strength in food categories, private brand sales and higher ticket and store transactions (read: Retail ETFs in Focus As Big-Box Q4 Earnings Unfold).
The mega retailer offered downbeat guidance for the fiscal year 2024 and warned that tight spending by consumers could put pressure on profit margins. It expects earnings per share in the range of $5.90-$6.05 for fiscal 2024, much lower than the Zacks Consensus Estimate of $6.49. Sales are expected to grow 2.5-3% and U.S. comp sales, excluding fuel, will rise 2-2.5% for the fiscal year.
For fiscal-quarter fiscal 2024, earnings per share are expected to be in the range of $1.25-1.30 while sales will likely grow 4.5-5%.
Walmart boosted its annual dividend by $0.04 to $2.28 per share, marking the 50th consecutive year of dividend increase.
Below, we have detailed the ETFs:
Qraft AI-Enhanced U.S. Large Cap Momentum ETF (AMOM - Free Report)
Qraft AI-Enhanced U.S. Large Cap Momentum ETF is an actively-managed exchange-traded fund that aims to provide investors with long-term capital appreciation by utilizing a proprietary artificial intelligence system to select large-capitalization U.S. stocks to be held in the portfolio. It holds 50 stocks in its basket, with Walmart occupying the top spot at 7.95%. Consumer cyclicals and energy are the top two sectors with one-fourth allocation each followed by technology, industrials and consumer non-cyclicals.
Qraft AI-Enhanced U.S. Large Cap Momentum ETF has accumulated $12 million in its asset base while trading in a volume of 1,000 shares a day on average. It charges 75 bps in annual fees.
iShares Evolved U.S. Discretionary Spending ETF (IEDI - Free Report)
iShares Evolved U.S. Discretionary Spending ETF is an actively managed ETF that employs data science techniques to identify companies with exposure to the discretionary spending sector. It follows the Cboe BZX, formerly known as BATS, and holds 164 stocks in its basket. Walmart occupies the fourth position with a 7.5% share. IEDI is dominated by retailing with nearly half of the portfolio, while food & staples retailing and consumer services round off the next two with double-digit exposure each.
iShares Evolved U.S. Discretionary Spending ETF has accumulated $13.6 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 4,000 shares a day, on average.
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF tracks the MSCI USA IMI Consumer Staples Index, holding 109 stocks in its basket. Of these, Walmart takes the fifth spot with a 7.3% share in FSTA (see: all Consumer Staples ETFs here).
Fidelity MSCI Consumer Staples Index ETF has amassed $1.1 billion in its asset base while trading in a good volume of around 125,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Consumer Staples ETF (VDC - Free Report)
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 101 stocks in its basket, with Walmart occupying the fifth position, having a 7.3% allocation. Vanguard Consumer Staples ETF is widely spread across soft drinks, household products, packaged foods & meats, and hypermarkets & supercenters that make up for a double-digit allocation each.
Vanguard Consumer Staples ETF manages a $6.6 billion asset base and charges a fee of 10 bps per year. VDC trades in a good volume of around 134,000 shares per day, on average, and has a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Retail ETF (RTH - Free Report)
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the third spot with a 6.2% share (read: ETF Areas to Win on Upbeat January Retail Sales).
VanEck Vectors Retail ETF has amassed $153.9 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 7,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 with a Medium risk outlook.