Walmart The retailer raised its sales and profit outlook on Thursday as the retailer reported sales gains in its fiscal third quarter, driven by double-digit e-commerce growth and new customer revenue.
The retailer said it expects its full-year net sales to rise between 4.8% and 5.1%, up from its previous expectations of 3.75% to 4.75%. It said it expects its adjusted earnings per share to be between $2.58 and $2.63, a slight increase from its previous range of $2.52 to $2.62.
This is the second quarter in a row that Walmart has raised its full-year guidance.
Walmart’s earnings report is the first since the Arkansas-based company announced a leadership change. The big-box retailer announced last week that John Furner, the CEO of its U.S. operations, would succeed longtime CEO Doug McMillon on Feb. 1.
In an interview with CNBC, CFO John David Rainey said consumer habits did not change during the quarter, with shoppers spending selectively and looking for deals. He said Walmart has won these “value-seeking” revenue-driven customers, both because of the economic environment and its own strategic decisions.
“Consumers are looking to do business with companies that provide value, that provide the convenience they know and expect, and that consistently execute well,” he said.
He said Walmart saw the impact of the pause in Supplemental Nutrition Assistance Program, or SNAP, benefits, formerly known as food stamps, during the extended government shutdown. But he added that “it’s starting to rebound now that people are receiving these funds again.”
Here’s what the big-box retailer reported for the fiscal third quarter compared to Wall Street estimates, according to a survey of analysts by LSEG:
- Earnings per share: 62 cents adjusted versus 60 cents expected
- Income: $179.50 billion versus $177.43 billion expected
Walmart also announced Thursday that it would transfer the listing of its common stock to Nasdaq and that it would begin trading there on Dec. 9. They are currently traded on the New York Stock Exchange. It will carry the same ticker symbol, “WMT”.
As of Wednesday’s close, Walmart shares were up about 11% year to date. That’s behind the S&P 500’s nearly 13% gains over the same period.
As a retail giant that attracts shoppers of all incomes, Walmart is closely watched as an indication of the health of the American consumer and how President Donald Trump’s tariffs are affecting the prices shoppers pay. It can look at consumer behavior across categories, since it sells discretionary items like makeup and clothing as well as daily necessities like milk and toilet paper.
Walmart gained more high-income customers as even wealthy households sought relief from higher grocery bills due to high inflation in recent years. This cohort also responded by renovating stores and speeding up deliveries.
Those gains continued into the most recent quarter as Walmart sought to offer better convenience as well as pricing, Rainey told CNBC.
Some of those shoppers came to Walmart for speed, Rainey said. The retailer can now deliver to approximately 95% of U.S. homes from stores in less than three hours.
Customers now ship about a third of their online orders from stores to arrive within one or three hours, he said. He said revenue from these faster deliveries increased 70% year over year. The company charges a fee for some of these faster deliveries and others are included as part of its subscription membership program, Walmart+.
The service is popular even with low-income buyers, he said. During the weeks of November, when SNAP benefits were suspended, Rainey said Walmart noticed a drop in that volume.
In the three months ended Oct. 31, Walmart’s net income rose to $6.14 billion, or 77 cents per share, from $4.58 billion, or 57 cents per share, a year earlier.
Excluding one-time items, such as corporate reorganization costs, Walmart’s adjusted earnings per share were 62 cents.
Revenue increased from $169.59 billion in the year-ago quarter.
Walmart US comparable sales increased 4.5% in the third quarter, excluding fuel, compared to the same period last year. That beat analysts’ expectations of 4% growth, according to StreetAccount. The industry metric, also called same-store sales, includes sales of stores and clubs open at least one year.
At Sam’s Club, comparable sales were up 3.8% excluding fuel.
Walmart’s e-commerce sales increased 27% globally, with all segments of the company seeing strong increases. In the United States, e-commerce grew 28%, driven by increased in-store delivery of online orders and growth in advertising and its third-party marketplace.
International e-commerce sales jumped 26% and Sam’s Club U.S. sales increased 22%.
In the United States, shoppers visited Walmart more and spent more on those visits. Customer transactions increased by 1.8% and the average ticket increased by 2.7%.
As Walmart increases its digital traffic and adds more products to its third-party marketplace, advertising is also a significant growth area. During the quarter, its global advertising business grew 53%, including Vizio, the smart TV maker it acquired last year for $2.3 billion. Its U.S. advertising business, Walmart Connect, grew 33% year-over-year.
Like other retailers, Walmart said it raised prices on some items to offset higher costs from tariffs. About a third of what Walmart sells in the United States comes from other parts of the world, with China, Mexico, Canada, Vietnam and India representing its largest import markets, Rainey told CNBC in May.
In a phone call Thursday, Rainey said that when it comes to rising tariff costs, “the pressure is real.” Still, he said Walmart’s team managed to reduce the impact on customers by finding ways to absorb some costs.
Walmart’s results Thursday followed cautious updates from Target, Home Depot and Lowe’s. All three retailers lowered their full-year profit outlook this week and cited consumers hesitant to make big purchases and hungry for bargains.
TJ Maxx and Marshalls parent company TJX, meanwhile, raised their full-year forecasts, saying they see a “strong start” to the holidays as they cater to value-conscious shoppers.
Rainey said Walmart was “approaching the holidays with a lot of optimism,” saying it was prepared for competitive pricing.
