Top US stocks: Walmart, Home Depot and Roblox

Walmart smashes expectations, Home Depot sees growth slow as DIY demand wanes, Roblox sees revenue more than double, Krispy Kreme reports later today, Berkshire Hathaway cuts exposure to pharmaceutical firms, and T-Mobile confirms it has suffered a data breach.

USA (1)

Walmart

Walmart raised its guidance for the full year for the second time after smashing expectations in the latest quarter, stating it grew its market share in the US grocery market, added thousands of new sellers to its marketplace and grew income from advertising.

Revenue grew by 2.4% to $141.0 billion in the second quarter from $137.74 billion the year before, surprising analysts that were expecting revenue to decline year-on-year to $136.75 billion. US comparable sales grew by 5.2%, well ahead of the 2.5% forecast by Wall Street. The 7.7% same-store sales growth at Sam’s Club also beat the 3% expected. Operating income – Walmart’s key profit measure – rose 21% to $7.4 billion and breezed past the $6.38 billion Wall Street had expected.

Walmart said it is now expecting annual net sales to come in slightly higher year-on-year, having previously forecast a decline, and said comparable US sales will grow 5% to 6% compared to low single-digit growth beforehand. Operating income will rise 11% to 13.5% this year after being raised from high single-digit growth. It also said ecommerce sales will reach $75 billion by the end of the year.

Home Depot

Home Depot said it achieved over $40 billion worth of quarterly sales for the first time as it released its latest set of quarterly results, although US same-store sales growth disappointed the markets.

Home Depot said sales rose 8.1% year-on-year in the second quarter to $41.1 billion, with comparable sales up 4.5%. US comparable sales grew by 3.4%, a marked slowdown from the 25% jump reported a year earlier as it starts to come up against tougher comparatives and growth for the DIY sector slows as restrictions ease. That was slower than the 4.9% US growth expected by analysts.

Net earnings grew to $4.8 billion from $4.3 billion, or to $4.53 from $4.02 on a per share basis.

Roblox

Roblox said revenue more than doubled and free cashflow hit a new record in the latest quarter as it revealed it continued to grow its user base and improve engagement.

Revenue jumped to $454.1 million in the second quarter from $200.4 million. Average daily active users grew 29% to 43.2 million, with faster growth being delivered outside North America. It also said there was a 46% rise in the number of users over the age of 13 as it continues to demonstrate the widening appeal of its platform. Hours engaged also improved 13% compared to last year.

Still, the net loss swelled to $142.9 million from $72.3 million the year before. Roblox said the third quarter was ‘off to a good start’ as user numbers and engagement levels continue to hit new record levels.

Krispy Kreme

Donut maker Krispy Kreme will report second quarter results later today, marking the first earnings since completing its $3 billion IPO last month.

Analysts are expecting revenue of $333.4 million and for its to squeeze out net income of around $1.9 million. That would be up from $290.2 million in revenue and the $11.7 million loss the year before and will also mark an improvement from the first quarter of 2021.

Krispy Kreme shares listed at $17 per share, having been lowered below its target range just before listing, and have lost ground since then to trade closer to $15 before the opening bell today.

Berkshire Hathaway

Berkshire Hathaway revealed it reduced its exposure or exited from a number of pharmaceutical companies in the second quarter, a new regulatory filing revealed.

The firm, led by renowned investor Warren Buffet, revealed it exited from its stake in Biogen and trimmed its investments in Abbvie, Bristol-Myers Squibb and Merck. Although it did reveal a new investment in a company spun-off from Merck named Organon. It also sold its stake in Axalta Coating Systems and cut holdings in Chevron, General Motors, Liberty Global and US Bancorp.

Its largest investments at the end of June were in Apple and Bank of America Corp. It bumped up its exposure in companies including Kroger and Aon, which has recently suffered following the collapse of a proposed merger with Willis Towers Watson.

Tesla

Tesla is beefing up its legal and external relations team in China after posting jobs for several new positions on its Wechat account, according to media reports.

The company, which produces electric cars out of its factory in Shanghai, is said to be advertising for several managers in Beijing, Shanghai and Shenzen. The reports suggest they will work on government relations and that Tesla is also looking for lawyers who specialise in areas such as construction, anti-monopoly law and data protection.

T-Mobile

T-Mobile confirmed yesterday that data had been illegally accessed but said it does not know the extent of the breach or if personal customer data is involved.

Reports emerged yesterday of claims that data on 100 million customers was for sale online. T-Mobile said the access point is now closed and it is now identifying what data has been affected.

‘We take the protection of our customers very seriously and we are conducting an extensive analysis alongside digital forensic experts to understand the validity of these claims, and we are coordinating with law enforcement,’ said T-Mobile.

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