Unlike many of its retail peers, this morning Walmart gave an all clear when it signaled that the retail giant was weathering the global supply-chain snarls and rising inflation successfully, when it not only beat Wall Street’s expectations - despite its margins suffering a hit in the third quarter - but lifted its annual sales outlook and profit forecast again in anticipation of soaring demand during the crucial holiday season.
First, here's what the company reported for the just concluded third quarter:
- Adjusted EPS $1.45, estimate $1.40 (range $1.33 to $1.51)
- Revenue $140.53 billion, +4.3% y/y, estimate $135.69 billion (range $130.66 billion to $140.52 billion)
The big revenue beat was driven by a surge in Q3 comparable sales which soared 9.2% at Walmart’s U.S. stores after excluding fuel, well above the 7% average estimate:
- Walmart-only U.S. stores comparable sales ex-gas +9.2%, estimate +7.03%
- Sam's Club U.S. comparable sales ex-gas +13.9%, estimate +7.75%
- Total U.S. comparable sales ex-gas +9.9%, estimate +6.99%
Remarkably unlike previous quarters when the comp store beat was driven by tickets at the expense of traffic, in Q3 customers both bought more items and paid more for the goods. Transactions rose 5.7% and average ticket climbed 3.3%, reflecting inflationary trends that are sweeping the consumer sector. here is the full breakdown:
- Walmart-only U.S. comparable transactions +5.7%, estimate +7.75%
- Walmart-only U.S. comparable ticket +3.3%, estimate 0%
And visually:
Additionally, the company's E-Commerce sales continued to grow at an impressive pace, rising +8%, above the average estimate of +1.93%, while Sam's Club e-commerce sales soared 32%.
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