Walmart raises its forecast once more as customers increase spending beyond the grocery aisles.
Walmart raised its forecast on Tuesday, attributing the boost to increased customer spending on discretionary items, higher home delivery orders, and early holiday shopping.
The retailer now expects net sales to grow between 4.8% and 5.1% for the year, up from the previous forecast of 3.75% to 4.75%. This update followed the release of Walmart’s third-quarter earnings, which surpassed Wall Street’s expectations.
In a CNBC interview, CFO John David Rainey highlighted that general merchandise sales (excluding groceries) grew year-over-year for the second consecutive quarter, after 11 straight quarters of declines. He also noted that while consumers are spending more, they’re waiting for compelling deals, especially given the rising cost of food.
“We expect the holiday season to follow this trend,” Rainey said. “Shoppers are focused on price and value.”
Here’s a look at Walmart’s reported figures compared to analyst expectations:
- Earnings per share: 58 cents adjusted vs. 53 cents expected
-Revenue: $169.59 billion vs. $167.72 billion expected
Walmart shares surged about 3% in early trading, reaching a 52-week high and setting an all-time intraday high since it began trading on the NYSE in August 1972.
For the quarter ending October 31, Walmart’s net income rose to $4.58 billion, or 57 cents per share, compared to $453 million, or 6 cents per share, in the same period last year. Revenue increased from $160.80 billion in the previous year’s quarter.
Comparable sales (same-store sales) increased 5.3% for Walmart and 7% at Sam’s Club, excluding fuel.
U.S. customers visited Walmart more frequently and spent more per visit compared to the previous year. Walmart U.S. transactions rose 3.1%, with average ticket prices up 2.1%. E-commerce sales grew 22%, driven by curbside pickup, home delivery, and Walmart’s expanding advertising and third-party marketplace businesses.
Rainey noted that customers have been willing to pay extra for faster deliveries, with 30% of U.S. orders in the last two quarters including an added fee for expedited delivery, such as within one or three hours.
“We’re getting very close to profitability in our e-commerce business because these incremental fees help cover delivery costs,” Rainey explained.
Walmart’s strong results come amid a mixed bag of factors for retailers this holiday season. While inflation has eased, with lower gas prices and grocery inflation remaining modest, concerns about tariffs and a shorter holiday season due to unseasonably warm weather linger.
Rainey mentioned that tariffs could lead to higher prices, though it’s unclear which products would be affected. He emphasized that about two-thirds of Walmart’s merchandise is produced domestically, mitigating some tariff risks. The company is also diversifying its sources for imports.
Holiday spending is expected to rise modestly this year, with the National Retail Federation forecasting a 2.5% to 3.5% increase in November and December, bringing total holiday sales to between $979.5 billion and $989 billion.
Rainey noted that the holiday season is “off to a pretty good start,” with items like TVs, Apple AirPods, Beats headphones, and even tires performing well. However, clothing and weather-dependent products like space heaters have seen slower sales due to warm weather in parts of the U.S.
Walmart’s growth in general merchandise is also attributed to its strategy of expanding its toy, home goods, and third-party marketplace offerings.
As of Monday’s close, Walmart’s stock has surged nearly 60% this year, outperforming the S&P 500, which has risen about 24% during the same period. Walmart’s market value stands at $675.86 billion.Walmart raised its forecast on Tuesday, attributing the boost to increased customer spending on discretionary items, higher home delivery orders, and early holiday shopping.
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The retailer now expects net sales to grow between 4.8% and 5.1% for the year, up from the previous forecast of 3.75% to 4.75%. This update followed the release of Walmart’s third-quarter earnings, which surpassed Wall Street’s expectations.
In a CNBC interview, CFO John David Rainey highlighted that general merchandise sales (excluding groceries) grew year-over-year for the second consecutive quarter, after 11 straight quarters of declines. He also noted that while consumers are spending more, they’re waiting for compelling deals, especially given the rising cost of food.
“We expect the holiday season to follow this trend,” Rainey said. “Shoppers are focused on price and value.”
Here’s a look at Walmart’s reported figures compared to analyst expectations:
- Earnings per share: 58 cents adjusted vs. 53 cents expected
- Revenue: $169.59 billion vs. $167.72 billion expected
Walmart shares surged about 3% in early trading, reaching a 52-week high and setting an all-time intraday high since it began trading on the NYSE in August 1972.
For the quarter ending October 31, Walmart’s net income rose to $4.58 billion, or 57 cents per share, compared to $453 million, or 6 cents per share, in the same period last year. Revenue increased from $160.80 billion in the previous year’s quarter.
Comparable sales (same-store sales) increased 5.3% for Walmart and 7% at Sam’s Club, excluding fuel.
U.S. customers visited Walmart more frequently and spent more per visit compared to the previous year. Walmart U.S. transactions rose 3.1%, with average ticket prices up 2.1%. E-commerce sales grew 22%, driven by curbside pickup, home delivery, and Walmart’s expanding advertising and third-party marketplace businesses.
Rainey noted that customers have been willing to pay extra for faster deliveries, with 30% of U.S. orders in the last two quarters including an added fee for expedited delivery, such as within one or three hours.
“We’re getting very close to profitability in our e-commerce business because these incremental fees help cover delivery costs,” Rainey explained.
Walmart’s strong results come amid a mixed bag of factors for retailers this holiday season. While inflation has eased, with lower gas prices and grocery inflation remaining modest, concerns about tariffs and a shorter holiday season due to unseasonably warm weather linger.
Rainey mentioned that tariffs could lead to higher prices, though it’s unclear which products would be affected. He emphasized that about two-thirds of Walmart’s merchandise is produced domestically, mitigating some tariff risks. The company is also diversifying its sources for imports.
Holiday spending is expected to rise modestly this year, with the National Retail Federation forecasting a 2.5% to 3.5% increase in November and December, bringing total holiday sales to between $979.5 billion and $989 billion.
Rainey noted that the holiday season is “off to a pretty good start,” with items like TVs, Apple AirPods, Beats headphones, and even tires performing well. However, clothing and weather-dependent products like space heaters have seen slower sales due to warm weather in parts of the U.S.
Walmart’s growth in general merchandise is also attributed to its strategy of expanding its toy, home goods, and third-party marketplace offerings.
As of Monday’s close, Walmart’s stock has surged nearly 60% this year, outperforming the S&P 500, which has risen about 24% during the same period. Walmart’s market value stands at $675.86 billion.
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