Walmart reports strong Q3 results
Walmart's third quarter results reflected strong growth in revenue and operating income.
“We had a strong quarter, continuing our momentum. Our associates are working hard to save people time and money and to transform our business," said Doug McMillon, president and CEO of Walmart. "In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that. Our teams are executing and delighting our customers and members with the value and convenience they expect from Walmart.”
The retailer reported that globally, eCommerce grew 27% with penetration up across all segments. Walmart U.S. comp sales were up 5.3% with positive growth in general merchandise.
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Other third-quarter highlights:
• Consolidated revenue of $169.6 billion, up 5.5%, or 6.2%
• Consolidated gross margin rate up 21 bps, led by Walmart U.S.
• Consolidated operating income up $.5 billion, or 8.2%, up 9.8% due to higher gross margins and growth in membership income; also benefited from reduced losses in eCommerce
• ROA at 7.8%; ROI at 15.1%, up 100 bps
• Global eCommerce sales grew 27%, led by store-fulfilled pickup & delivery and marketplace
• Global advertising business grew 28%, including 26% for Walmart Connect in the U.S.
• Adjusted EPS of 58 cents excludes the effect, net of tax, from a net loss of $0.01 on equity and other investments
• Global inventory was down 1%, including a decrease of .6% for Walmart U.S.; in-stock levels healthy
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Walmart U.S.:
• Walmart’s sales reflect broad-based strength across merchandise categories and physical and digital channels
• Walmart reported strong transaction counts and unit volumes; share gains primarily from upper-income households
• E-commerce sales were up 22%, led by store-fulfilled pickup & delivery, advertising and marketplace
• Walmart Connect grew 26%; marketplace sellers were cited for driving growth in advertiser counts
• Walmart reported gross profit rate increased 42 bps; membership income was up double-digits; operating expense deleveraged 33 bps
• The retailer’s operating income was up 9.1% with expansion of gross margin and membership income as well as lower losses in eCommerce, aided by improved business mix
• Inventory declined .6% while maintaining healthy in-stock levels
Walmart International:
• Growth in net sales led by Flipkart, Walmex and China; transaction counts and unit volumes were up across markets
• Sales reflects growth in general merchandise and food and consumables
• Timing of Flipkart’s The Big Billion Days event benefited growth in Q3 and will impact growth in Q4
• E-commerce sales were up 43%, led by marketplace and store-fulfilled pickup & delivery; penetration was up across markets
• Advertising business grew 50%, led by Flipkart
• Growth in eCommerce sales and advertising business for 2H is expected to be similar to 1H
• Operating income grew across markets; benefited from lower losses in eCommerce
Sam’s Club U.S.:
• Strong sales growth across club and digital channels, led by food and health & wellness categories
• Comp growth primarily driven by transaction counts and unit volumes
• Share gains in grocery and general merchandise categories, including apparel and consumer electronics
• E-commerce sales were up 26%, led by club-fulfilled pickup and delivery
• Strong growth in membership income, up 15%
• Gross profit rate increased 47 bps; operating expense deleveraged 63 bps
• Associate wage investments announced Sept. 17 and effective Nov. 2 will impact Q4 operating income growth
Walmart raised its guidance for FY25 with net sales expected to grow 4.8% to 5.1% and adjusted operating income to grow 8.5% to 9.25% in constant currency.