Walmart Inc. sales surged past estimates as consumers continue to flock to the essential retailer for carts full of groceries, pharmacy items and at-home entertainment while the virus rages on. Shares rose.

-U.S. comparable sales at Walmart stores rose 6.4 per cent when excluding fuel, beating estimates for a 3.8 per cent rise, with online demand soaring. The sales gain didn’t come at the expense of margins, however: Walmart’s gross margin added 50 basis points as it reduced operating expenses and COVID-19-related costs.

Key Insights

-The results at the world’s largest retailer offer investors fresh insight on consumer behavior heading into the critical holiday season. In terms of buying patterns, shoppers are still stocking up. Transactions fell 14 per cent during the quarter at U.S. Walmart locations, while the average purchase surged 24 per cent -- meaning shoppers are consistently buying more every time they place an order

-Sam’s Club also reported sales that beat estimates as it pushes to lure more members with delivery, pickup and smaller serving sizes to appeal to those not planning large holiday gatherings this year. Sam’s Club same-store sales growth of 11.1 per cent surpassed expectations for a 7.1 per cent gain, according to Consensus Metrix.

-U.S. e-commerce sales at Walmart rose 79 per cent in the quarter and 41 per cent at its warehouse chain. The company said in September that it would hire more than 20,000 workers to prepare for a surge in online shopping amid the pandemic. That’s the company’s first large seasonal hiring in five years

-Walmart’s response to Amazon Prime, dubbed Walmart+, launched in September at a price of US$98 a year that includes unlimited free delivery from stores and gasoline discounts. Investors will be waiting to hear more about how it’s going on the call today, with details scant in the release.

Market Reaction

-Walmart shares climbed as much as 2.3 per cent in early trading in New York on Tuesday. The company this year has gained 28 per cent through Monday.