Walmart Boosts Full-Year Outlook on Strong 3Q Sales
Walmart Inc. is approaching the crucial holiday season on a high note, posting solid third-quarter sales and raising its full-year outlook again, showcasing its resilience in the face of Amazon.com Inc.’s advances. The shares rose in early trading.
- Comparable sales excluding gas for Walmart stores in the U.S. rose 3.2 per cent in the period, just beating analysts’ 3.1 per cent growth estimate and marking the 21st straight gain. Both the number of customers and the size of their average orders were up, fueling the growth.
- This is the second time this year Walmart has upgraded its guidance. It now sees full-year adjusted earnings per share increasing slightly compared to last year, after saying in August either a slight decrease or slight increase was possible. The rosier outlook contrasts with more downbeat expectations from retailers like Macy’s Inc., which slashed its profit guidance in August. Earlier this month, Moody’s cut its expectations for the entire U.S. retail sector, citing “intense competition in the fight for market share.”
- Walmart’s web sales in the U.S. rose 41 per cent, ahead of its expected growth rate for the full year. It has rapidly expanded its online grocery service and in recent weeks debuted a new offering in three cities where employees put the food right into customers’ fridges.
- Sam’s Club, the company’s warehouse division that accounts for about 11 per cent of its revenue, was one weaker spot. Comparable sales there rose only 0.6 per cent, just one-third the pace analysts surveyed by Consensus Metrix had been expecting. A drop in tobacco sales negatively hit sales by 350 basis points, it said. The chain is still without a leader a month after Sam’s CEO John Furner was tapped to replace Greg Foran as head of Walmart’s U.S. stores division.
- Walmart shares rose as much as 2.2 per cent in premarket trading. The shares had climbed 30 per cent this year through Wednesday’s close, compared with the 23 per cent gain in the benchmark S&P 500 Index.