Strength in Walmart U.S., Sam’s Club U.S., Flipkart and Walmex helped Walmart ring up third-quarter revenue of $152.8 billion, an increase of 8.7%, or 9.8% in constant currency.
“We had a good quarter with strong top-line growth globally led by Walmart and Sam’s Club U.S., along with Flipkart and Walmex," said Doug McMillon president and CEO of Walmart.
McMillon continued, "Walmart U.S. continued to gain market share in grocery, helped by unit growth in our food business. We significantly improved our inventory position in Q3, and we’ll continue to make progress as we end the year. From The Big Billion Days in India, through our Deals for Days events in the United States and a Thanksgiving meal that will cost the same as last year, we’re here to help make this an affordable and special time for families around the world. We have an amazing group of associates that make all this happen, and I want to say thank you.”
Walmart reported its U.S. comp sales grew 8.2% and 17.4% on a two year stack.
The retailer’s e-commerce growth was 16% and 24% on a two-year stack.
Walmart also shared that it continued to gain market share in grocery. Sam’s Club comp sales increased 10%, and 23.9% on a two-year stack. Membership income increased 8% with member count reaching an all-time high, the company said.
Walmart International net sales were $25.3 billion, an increase of $1.7 billion, or 7.1%, negatively affected by $1.5 billion from currency fluctuations. Segment operating income led by double-digit growth for Walmex.
Walmart’s consolidated gross profit rate declined 89 basis points, primarily due to markdowns and a mix of sales in the United States, an inflation-related LIFO charge at Sam’s Club and the timing of Flipkart’s annual event, The Big Billion Days. Consolidated operating expenses as a percentage of net sales increased 144 basis points due to charges of $3.3 billion related to opioid legal settlements. Adjusted operating expenses as a percentage of net sales decreased 75 basis points, primarily due to strong sales growth and lower COVID-related costs, the company said.
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The retailer’s consolidated operating income was $2.7 billion, a decrease of 53.5%, including the legal charges described above. Adjusted operating income was $6 billion, an increase of 3.9%.
Walmart reported adjusted EPS of $1.50, which excludes the effects, net of tax, of $1.11 from net losses on equity and other investments and $1.05 from charges related to opioid legal settlements.
Subsequent to the third quarter Walmart approved a new $20 billion share repurchase authorization replacing its existing authorization, which had approximately $1.9 billion remaining at the end of Q3.
Walmart expects Q4 consolidated net sales growth of about 3%, negatively affected by approximately $1.3 billion from currency fluctuations; Walmart U.S. comp sales, excluding fuel, of about 3%; consolidated operating income increase 1% to decline 1%; and an adjusted EPS decline of 3% to 5%.
The company raised its full-year outlook to reflect third quarter performance:
- Consolidated net sales growth of about 5.5%;
- Excluding divestitures, consolidated net sales growth of about 6.5%;
- Based on current exchange rates, the company expects a headwind of about $4.1 billion for the year;
- Walmart U.S. comp sales growth, excluding fuel, of about 5.5%; consolidated adjusted operating income decline of 6.5% to 7.5%, which improved from the company’s prior guidance of a decline of 9% to 11% and reflects better performance in the third quarter;
- Excluding divestitures, consolidated adjusted operating income decline of 5.5% to 6.5%;
- Adjusted EPS decline of 6% to 7%; and
- Excluding divestitures, adjusted EPS decline of 5% to 6%.