New York — Walmart on Thursday raised its annual forecasts for the second time this year after another strong quarter led by surging online sales, in a signal of confidence headed into the holiday season.
The company also set a date in December to move its stock listing to Nasdaq.
It reported growth in US comparable sales, which includes online and stores, of 4.5% for the August-October period, above estimates for 3.8% growth, according to LSEG. It also forecast annual net sales to rise 4.8%-5.1%, compared with a prior target of a 3.75%-4.75% increase.
US households, particularly low- and middle-income earners, have been under mounting financial stress for some time due to persistent inflation and a slowing job market. The strain has sapped consumer confidence and is reshaping spending habits, as shoppers cut back on discretionary purchases such as home renovation and dining out while prioritising essentials at the lowest possible price.
This environment has benefited Walmart, long known as a destination for lower-income households but also increasingly for wealthier consumers. Over the past several quarters, Walmart has highlighted that households earning more than $100,000 have accounted for roughly two-thirds of its growth, with much of that momentum coming from Walmart+ subscribers, who benefit from free same-day and next-day delivery. By contrast, home improvement firms Lowe’s and Home Depot lowered their annual targets this week, blaming consumer weakness, and Target sales were also lower.
Adjusted earnings came in at 62c per share. Revenue rose 5.8% to $179.5bn.
Listing
Walmart also raised its annual adjusted earnings per share target range to $2.58-$2.63, from $2.52-$2.62 expected earlier, and said it would change its listing to the Nasdaq stock market from the New York Stock Exchange (NYSE) on December 9.
“Moving to Nasdaq aligns with the people-led, tech-powered approach to our long-term strategy,” said CFO John Rainey.
Nasdaq has beaten the NYSE for listings in recent years because it is appealing to technology firms and has more flexible requirements.
Walmart named veteran executive John Furner as its new CEO last week, replacing Doug McMillon at a time when the retail bellwether is deepening its push to become more tech savvy by adopting AI in everything from inventory management and demand forecasting to search and advertising.
The company’s operating income has held up fairly well even in a choppy economy as it derives about half of its profit growth from advertising revenue, Walmart marketplace sales and fee revenue, and its $98/year Walmart+ membership programme.
Global advertising revenue grew 53% in the quarter, compared with 46% in the second quarter.
“E-commerce was a bright spot again. We’re gaining market share, improving delivery speed and managing inventory well,” said outgoing CEO Doug McMillon in a statement.
Reuters
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