Shoppers are still flocking to Walmart (WMT), but America’s largest retailer is sounding cautious about the future amid an uncertain macroeconomic backdrop.
Walmart posted a revenue of $160.8 billion for its third quarter earnings on Thursday morning. Total revenue is up 5.2% compared to last year and is higher than expectations of $159.13 billion. Its US same-store sales grew 4.7%, higher than the expected 3.35%.
Adjusted earnings per share came in at $1.53, versus estimates of $1.52.
Foot traffic grew 3.40%, more than the 1.50% expected. Ticket size is up 1.5%, lower than the expected 2.08%.
“I think what’s encouraging is that our traffic, our transaction counts, remained strong and consistent throughout the quarter,” said Walmart CEO Doug McMillon, who pointed to a “pressured consumer” and unusual weather in late October as a potential reason for a shift in spending.
Despite the earnings beat, Walmart gave soft guidance for the rest of the year. It raised its full-year earnings per share outlook to $6.40-$6.48, higher than its previous guidance of $6.36-$6.46, but lower than the expected $6.48.
Shares fell nearly 8% in early trading after the report.
“Recently, we’ve experienced a higher degree of variability and weekly performance in between holiday events in the US, including seeing a softening in the back half of October that was off trend to the rest of the quarter,” said CFO John Rainey in a call with investors.
Uneven sales numbers give the retailer reasons to be more cautious about the state of consumers, Rainey added. Walmart expects sales growth to moderate in Q4 as inflation in grocery prices slows down, but “we’re encouraged by the increased traffic and share gains we’ve seen and expect,” said Rainey.
A few areas that drove sales growth include e-commerce, grocery, and pharmacy sales.
E-commerce sales in the US jumped 24%, boosted by increasing pickup and delivery orders.
Story continues
Its grocery department continues to perform as US consumers look for value, with their wallets pinched by headwinds like higher interest rates and ongoing inflation, among…
..
