Walmart’s promise of low prices lured shoppers in 3rd quarter – National
Walmart ratcheted up sales and profits again in the third quarter with its comparatively low prices proving a powerful draw for shoppers seeking to cut spending where they could.
The nation’s largest retailer raised its outlook for the year as well and shares rose nearly 4% in premarket trading Tuesday.
Walmart, based in Bentonville, Arkansas, reported net income of $4.58 billion, or 57 cents per share, in the three months ended Oct. 31. That compares with $453 billion, or 6 cents per share in the year-ago period.
Adjusted earnings were 58 cents per share, five cents better than Wall Street had expected, according to a survey by FactSet.
Sales rose 5.5% to $169.59 billion, up from $160.8 billion in the year-ago period, and also easily beat analyst projections.
Comparable store sales — which include online and stores open for the past 12 months — rose 5.3% in the U.S. That is an acceleration from the 4.2% jump in the U.S. in the second quarter and 3.8% in the first quarter.
Sales reflect broad-based strength across all product categories and physical and digital channels, the company said.
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Global e-commerce sales rose 27%, compared with 21% in the fiscal second and first quarter.
Walmart is among the first major U.S. retailers to report quarterly results and provides a peek into how Americans are feeling as they head into the holiday shopping season. Industry analysts expect consumers to show up in force, though sales may not meet last year spending levels by Americans.
A post-pandemic inflation spike sent prices about 20% higher overall compared with three years ago and it soured Americans’ outlook on the economy, a key reason given by voters for sending Donald Trump back to the White House.
Yet even as many complained of how costs have strained household budgets, strong consumer spending, continues to drive steady growth in the U.S. economy. Retail sales rose 0.4% from September to October, the Commerce Department said Friday, a solid increase though it was half of the previous month’s jump.
Analysts will be sifting through Walmart’s results and may seek more information from company executives regarding Trump’s proposed tariffs during a conference call Tuesday. Trump has vowed that he’ll put a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports.
Companies have already rerouted some production away from China, but an aggressive trade policy could accelerate those plans.
Shoe brand Steve Madden announced earlier this month that it will be be cutting the goods that it imports from China by as much as 45% next year.
For the current fiscal year, Walmart expects earnings per share in the range of $2.42 to $2.47. That’s up from its August projections for per-share earnings of between $2.35 and $2.43. Analysts expect $2.45 per share, according to FactSet.
The company also expects sales to increase by 4.8% to 5.1% for the year, up from a range of 3.75% to 4.75%.
© 2024 The Canadian Press
