Walmart raises outlook on heels of another strong quarter
Walmart is heading into the holidays with momentum after the retail giant reported better-than-expected third quarter earnings and revenue as traffic increased to its stores and website.
Not only did more customers shop at Walmart U.S. during the quarter, they also spent more, with the average ticket rising 2.1% over the same period last year. The chain’s market share also increased during the quarter, driven primarily by upper-income households.
Walmart raised its full-year forecast for sales and profit, higher than the estimates it had already increased in its last earnings report three months back.
"We had a strong quarter, continuing our momentum," stated Walmart CEO Doug McMillon. "In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that."
David Silverman, senior director, Fitch Ratings, noted that Walmart's strong third quarter indicated a good start to the holiday season as customers respond "to their value messaging, merchandising enhancements, well developed omnichannel model and efforts to improve customer service and the shopping experience."
Net income rose to $4.58 billion, or $0.57 a share for the quarter ended Oct. 31, up from from $453 million, or $0.06 a share, in the year-ago period. Adjusted earnings were $0.58 per share, topping analysts’ estimates of $0.53 per share.
Total revenue rose 5.5% to $169.59 billion, above estimates of $167.69 billion. E-commerce sales surged 27%. Walmart has now beat revenue expectations for 19 straight quarters.
At Walmart U.S., sales rose 5% to $114.9 billion, also more than expected, with broad-based strength across merchandise categories and physical and digital channels.
Comparable-store sales rose better-than-expected 5.3%. The number of transactions rose 3.1%, and the average ticket increased 2.1%. E-commerce sales rose 22%, led by store-fulfilled pickup & delivery.
In an interview with CNBC, Walmart CFO John David Rainey said sales of general merchandise grew year-over-year for the second quarter in a row after declining for 11 straight quarters. International sales rose 8% to $30.3 billion.
Walmart’s global advertising business also continued to main gains, growing 28% during the quarter, including a 26% jump for Walmart Connect in the U.S. At Walmart’s Sam’s Club U.S., net sales rose 3.9% to $22.9 billion. Comparable sales, excluding fuel, rose 7%.
Looking ahead, Walmart raised its full-year 2024 guidance for adjusted earnings per share to $2.42 to $2.47 from its previous forecast to $2.35 to $2.43. Net sales are expected to grow 4.8% to 5.1%, up from its previous guidance of 3.75% to 4.75%.
