Despite issues around supply chain, inflation and labor, Walmart boasted a strong third quarter, seeing same-store sales up 9.2% for the quarter running through October, compared with the same quarter a year ago. Food categories exceeded expectations, rising 10% or $10 billion in sales volume.
The retailer and its Great Value store brand deliver consistently low prices, which could have aided its category sales, but the retailer finds itself in a good position heading into the holidays, either way.
In nonfoods, the retailer especially strengthened exclusive partnerships in the last month such as expanding its rollout with Gap Home, developing a fashion line with Ree Drummond and branching out the Free Assembly fashion line into kid’s clothing. During the third-quarter call, Walmart said its inventory was actually 11.5% ahead of the holiday season.
Net income for the quarter totaled $3.11 billion, down from $5.14 billion, a year ago. Total revenue rose 4.3% to $140.53 billion from $134.71 billion last year, topping estimates of $135.43 billion.
Walmart’s U.S. comparable sales (excluding fuel) grew 9.2%, ahead of estimates for 6.4%, and were up 15.6% on a two-year stack. Comp transactions in the quarter increased 5.7%. E-commerce sales in the United States grew 8% year-over-year, and rose 87% on a two-year basis.
At Sam’s Club, same-store sales increased 13.9%, and 25% on a two-year stack. Online e-commerce sales grew 32% for the club. Membership income increased 11.3%, the fifth consecutive quarter of double-digit growth.
“Our momentum continues with strong sales and profit growth globally,” said Doug McMillion, president and CEO, Walmart. “Our omnichannel focus is pushing digital penetration to record levels. We gained market shared in grocery in the U.S. and more customers and members are returning to our stores around the world.”
Walmart international sales fell 20.1% to $23.6 billion, impacted by divestitures.
For the full year, Walmart expects earnings per share of $5.00 and adjusted earnings per share of $6.40, up from its previous guidance of $6.20 to $6.35. The company expects U.S. comp sales growth of 6%. Analysts had been looking for earnings per share of $6.34 and U.S. comp growth of 0.8%.