Walmart store with gardening products for sale in Atchison, Kansas.
Ucg | Universal Images Group | Getty Images
Walmart on Thursday said sales rose 5% in the fiscal third quarter, as shoppers’ grocery purchases and the company’s growing e-commerce business again boosted the big-box retailer.
The retailer topped Wall Street’s quarterly earnings and revenue expectations.
The company anticipates adjusted earnings per share of $6.40 to $6.48 for the year, lower than the $6.48 analysts expect but higher than its previous range. Walmart expects consolidated net sales will rise 5% to 5.5%, also an increase from its prior range.
In an interview with CNBC, Chief Financial Officer John David Rainey said the retailer saw some concerning signs toward the end of the quarter. Sales in the final part of October were weaker than the rest of the three-month period, in terms of both dollars and units.
He added consumers are “leaning heavily into intense promotional-type periods,” putting off larger purchases until they see a deal.
“Our events have been strong,” he said. We’ve been pleased with those. Halloween was good overall. But in the in the last couple of weeks of October, there were certainly some trends in the business that made us pause and kind of rethink the health of the consumer.”
Here’s what Walmart reported for the three-month period ended Oct. 31 compared with what analysts were expecting, according to consensus estimates from LSEG, formerly known as Refinitiv:
- Earnings per share: $1.53 adjusted vs. $1.52 expected
- Revenue: $160.80 billion vs. $159.72 billion expected
In the fiscal third quarter, Walmart’s net income rose to $453 million, or 17 cents per share, compared with a loss of $1.8 billion, or 66 cents per share, in the year ago period. Walmart posted a loss in that quarter due to a settlement after opioid-related legal charges. Revenue rose from $152.81 billion in the year-ago period.
In the U.S., shoppers both visited and spent more. Customer transactions rose 3.4% and average ticket grew 1.5%. E-commerce sales increased 24% in the U.S. and 15% across the globe year over year.
As the holidays approach, investors have bet the big-box retailer has the ingredients to drive sales, even as shoppers are more discerning. It’s the nation’s largest grocer, which helps drum up steadier foot traffic.
It’s also making money in newer ways, such as selling ads and annual memberships to Walmart+, its answer to Amazon Prime.
Revenue for its ad business, Connect, jumped 26% from the prior-year period.
Shares of the company touched an all-time high Wednesday dating to when Walmart debuted on the New York Stock Exchange in August 1972. The stock closed at nearly $170 on Wednesday, up about 19% for the year.
Walmart has generally fared better than retail rivals during an inflationary period.
Target’s performance also lifted Walmart’s stock on Wednesday. Target’s sales declined year-over-year, but it topped Wall Street’s expectations for earnings and revenue.
Walmart has outperformed Target over the past year, leaning on grocery sales and a reputation for low prices.
This is breaking news. Please check back for updates.
