TLDR
- Walmart beat Q3 earnings with $0.62 per share versus $0.60 expected and revenue of $179.5 billion topping $177.6 billion forecast
- US comparable store sales grew 4.5%, exceeding 4% estimates, with foot traffic up 1.8% and average ticket up 2.7%
- Full-year guidance increased with net sales growth now projected at 4.8%-5.1% and EPS forecast raised to $2.58-$2.63
- eCommerce sales jumped 27% globally while advertising revenue soared 53% including Walmart Connect’s 33% US growth
- Shares declined 2% following the report as CEO Doug McMillon prepares for retirement with John Furner taking over
Walmart delivered third-quarter results that exceeded Wall Street expectations Thursday morning. The retail giant reported earnings of $0.62 per share, beating the analyst consensus of $0.60.
Revenue reached $179.5 billion, up 6% from last year. Analysts had projected $177.6 billion. Despite the beat, shares dropped 2% in early trading.
US comparable sales rose 4.5%, outperforming the 4% forecast. The gain came from 1.8% higher foot traffic and a 2.7% increase in average transaction size. These metrics show continued customer engagement across Walmart’s store base.
Digital Sales Drive Performance
eCommerce sales grew 27% globally during the quarter. This digital strength helped compensate for Sam’s Club, which grew 3.8% against expectations of 4.8%. The wholesale club segment came in below projections.
Walmart’s advertising platform showed explosive growth. The total advertising business jumped 53%, boosted by VIZIO contributions. Walmart Connect, the US-focused ad platform, grew 33% year-over-year.
Grocery sales, representing about 60% of US revenue, expanded by low single digits. Price rollbacks and improved delivery options drove unit volume gains. Shoppers also favored Walmart’s private label products.
Health and wellness sales grew in the low single digits. Pharmacy prescription counts led the category. Digital merchandising increased with strength in fashion, home goods, and auto care products.
Management Raises Outlook
The company lifted its full-year sales forecast to 4.8%-5.1% growth. The previous range was 3.75%-4.75%. Adjusted earnings per share guidance increased to $2.58-$2.63 from $2.52-$2.62.
Capital spending will reach 3.5% of net sales. That’s at the top of the prior 3%-3.5% range. The investment supports ongoing store upgrades and supply chain improvements.
“We’re gaining market share, improving delivery speed, and managing inventory well,” CEO Doug McMillon stated. He called this his final quarterly report before retiring early next year.
Leadership Change on Horizon
John Furner, currently Walmart US president, will become CEO. McMillon praised Furner as “a fantastic leader with a proven track record.” The transition marks a new era for the world’s largest retailer.
Membership income grew 16.7% during the quarter. This recurring revenue stream continues to expand as more customers sign up for Walmart+ benefits.
Gross margin improved 2 basis points, driven by US operations. International margins faced headwinds from timing of Flipkart’s Big Billion Days promotional event. Adjusted operating income climbed 8% in constant currency.
Operating income fell 0.2% due to a non-cash share-based compensation charge at PhonePe. The payment platform based in India recorded the one-time expense during the period.
Walmart announced it will switch its listing from NYSE to Nasdaq while keeping the WMT ticker. The move will happen in coming months as the company joins other major retailers on the tech-heavy exchange.
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