Higher Income Shoppers Help Walmart Gain Share
Walmart is heading into the holiday season on a positive note as the retailer closed out its fiscal year third quarter with strong sales growth with all divisions contributing to the company’s positive momentum.
For the quarter ending October 31, consolidated revenue was $169.6 billion, up 5.5% year-over-year. Operating income was up $500 million, or 8.2%, driven by higher gross margins, growth in membership income, and a reduction in losses in e-commerce. Adjusted earnings per share grew 13.7% to $0.58.
“We had a strong quarter, continuing our momentum,” said Doug McMillon, president and CEO of Walmart. “In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that. Our teams are executing and delighting our customers and members with the value and convenience they expect from Walmart.”
Net sales in the company’s Walmart U.S. division were $114.9 billion, up 5.5% year-over-year. Comparable store sales in the division were up 5.3%, driven by strengths across merchandise categories, the company said. E-commerce sales were up 22% while Walmart Connect was up 26%.
During Walmart’s investor conference call to discuss third quarter results, McMillon said the retailer continues to gain market share in the U.S. in grocery and general merchandise. Households earning more than $100,000 made up 75% of its share gains, he said.
“It was nice to see general merchandise grow low single digits in the U.S. even as prices are deflated by over 4%,” he said. “We currently have about 6,000 rollbacks in Walmart U.S. across all categories.”
Quarterly sales at Sam’s Club were $22.9 billion, an increase of 0.9% year-over-year. Comparable store sales growth (excluding fuel) were up 7%. The club retailer reported strong sales across club and digital channels led by food and health & wellness categories. Sam’s reported share gains in grocery and general merchandise categories including apparel and consumer electronics.
“We are executing on our member value proposition, which is value, it’s assortment, it’s great prices, and it’s building that trust with the members so you build a lifelong relationship with them,” said Chris Nicholas, president & CEO of Sam’s Club.
Growth at Sam’s Club is also driven by additional foot traffic. A report from Placer.ai revealed quarterly traffic at Sam’s store grew 5.2%, as each of the three major U.S. club retailers saw robust gains in shopper traffic during Q3. Costco’s traffic was up 7.2% and BJ’s Wholesale’s traffic was up 5.9%.
“Warehouse clubs have been thriving in 2024, buoyed by price-conscious consumers eager to load up on inexpensive essentials,” the Placer.ai report said.
Additionally, the three clubs have also been expanding their respective assortments of private brand products as part of an effort to give shoppers quality products that offer money-saving options.
