Walmart shares lower as upbeat sales offset by cautious guidance

Shoppers still flock to Walmart (WMT), but America’s largest retailers appear cautious about the future amid an uncertain macroeconomic backdrop.

On Thursday morning, Wal-Mart announced its third-quarter financial report, with revenue of US$160.8 billion. Total revenue increased 5.2% from last year, higher than the expected US$159.13 billion; U.S. same-store sales grew by 4.7%, higher than the expected 3.35%. %.

Adjusted earnings per share were $1.53, compared with expectations of $1.52.

Passenger traffic increased by 3.40%, higher than the expected 1.50%; ticket sales increased by 1.5%, lower than the expected 2.08%.

“I think it’s encouraging that our traffic and transaction volume remained strong and stable throughout the quarter,” Walmart Chief Executive Doug McMillon said, citing “consumer pressure” and 10 Unusual weather at the end of the month is a potential reason for this shift. in expenditures.

Despite the earnings beat, Walmart still gave soft guidance for the rest of the year, raising its full-year earnings per share forecast to $6.40-$6.48, higher than its previous guidance of $6.36-$6.46 but below expectations of $6.48.

The stock fell nearly 8% in early trading after the report was released.

Chief Financial Officer John Rainey said: “Recently, we have experienced a greater degree of volatility and week-to-week performance between holiday events in the U.S., including weakness in late October, which was consistent with the remainder of the quarter. The trends are different.” Conference call with investors.

Rainey added that the uneven sales data gave retailers reason to be more cautious about consumers’ conditions. Walmart expects sales growth to slow in the fourth quarter as grocery price inflation slows, but “we’re encouraged by the increased foot traffic and share gains we’ve seen and expected,” Rainey said.

Some areas driving sales growth include e-commerce, grocery and pharmaceutical sales.

U.S. e-commerce sales grew 24%, driven by an increase in pickup and delivery orders.

The company’s grocery stores continue to perform well as U.S. consumers seek value and their wallets are squeezed by headwinds such as rising interest rates and persistent inflation.

The category grew by the mid-single digits as consumers purchased more food products, including private label options, and more personal care products and pet supplies.

read more: 6 Ways to Save Money on Your Black Friday Shopping List

Walmart’s news release said its health and wellness segment saw double-digit sales growth due to “increased prescription volumes, mix of branded and generic prescription drugs, increased immunization efforts and higher brand drug prices.”

General merchandise saw low-single-digit growth as fewer people bought discretionary items such as clothing, home décor and toys.

In the U.S., inventories fell 5%, an issue that drew widespread attention last year as retailers carried too much stock.

Opponent target (TGT) Consumer spending has slowed, but it’s not as bad as Wall Street expected when earnings were reported on Wednesday.

The Walmart Store of the Future: Customer Shopping (Courtesy of Walmart)

The Walmart Store of the Future: Customer Shopping (Walmart)

Walmart recently announced $9 billion store improvement plan In the U.S.

Its operating expenses as a percentage of net sales increased 35 basis points in the third quarter. The company renovated 233 stores last quarter and has renovated 494 so far this year.

“We will continue our transformation plan over the next year,” Walmart U.S. CEO John Furner said.

The company also announced Significant changes in salary The company said “increased payroll-related costs” and legal expenses weighed on its operating expenses.

“Wage inflation is not as severe as it once was,” McMillian said on a conference call, adding, “We plan to increase wages appropriately for our employees next year.”

The legal costs began with a settlement surrounding opioid-related legal charges.

Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter: @Brooke DePalma Or send an email to

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