After Target Corporation (NYSE: TGT) reported a notable increase in earnings but also skipped the ‘drum roll’ of its holiday quarter outlook, Walmart Inc. (NYSE: WMT) gave cautious guidance as well as third-quarter earnings. It also topped earnings and revenue estimates. , According to the report, Walmart’s shares fell more than 7% during morning trading, despite the retail giant making money in new ways, such as selling advertising and its Walmart+ membership, with which it integrates e-commerce Titan is challenging none other than Amazon.com Inc. (NASDAQ: AMZN).
Highlights of the third quarter
For the quarter ended Oct. 31, Walmart reported revenue of $160.80 billion, surpassing LSEG’s estimate of $159.72 billion. Revenue increased due to higher inflation and a booming grocery business driven by strong digital sales. Walmart US comparable sales increased 4.9% year-over-year, followed by Sam’s Club with 3.8% growth. US shoppers visited and spent more, with transactions increasing 3.4% and average tickets increasing 1.5%. Additionally, U.S. e-commerce sales grew 24% year-over-year and 15% globally. Walmart’s advertising business, Walmart Connect, grew 26% year over year.
During the third fiscal quarter, Walmart earned net income of $453 million, or 17 cents per share, with adjusted earnings per share of $1.53, above the expected $1.52.
Walmart provided slightly lower annual guidance than expected
Although higher than the previously reported range, Walmart guided for annual adjusted earnings per share between $6.40 and $6.48, below LSEG’s expectation of $6.48. Walmart also raised its outlook for consolidated net sales and expects them to grow between 5% and 5.5%. Walmart CFO John David Rainey said the trends seen in October have forced management to reconsider the health of the company’s consumers. But when the holiday quarter started with promotions, sales picked up and accelerated.
Relief is coming just in time for the holidays, but only for buyers
The good news that Walmart, Target and Home Depot (NYSE: HD ) reported is that inflation has subsided. Walmart also said that for some categories, deflation has also taken its place, which is beneficial for shoppers, but not for the retailer’s top line. Like Target, Walmart saw a trend in consumer behavior of looking for deals. With consumers willing to wait patiently for an item’s price to drop, Target and Walmart saw declines in purchases made before and after the sale event.
Looks like the upcoming holiday season isn’t a very pleasant one
Walmart will compete to see who will make the fastest holiday delivery. Amazon has bounced back after a weak 2022. With its same-day sites and additional smaller fulfillment centers, Amazon is posing quite a challenge to Walmart. But Target and Walmart aren’t sitting back while Amazon gets products to its customers in a matter of hours. In a better-than-expected third quarter report, Target referenced same-day delivery as its growth driver. Meanwhile, Walmart is also adding automated fulfillment centers near its existing stores along with additional efforts to increase the speed of sending goods through its system. But, when even the country’s largest grocer is being cautious about the holiday season, it undoubtedly gives off Sad Santa vibes.
Disclaimer: This content is for informational purposes only. It is not intended to provide investment advice.
“The Secret Weapon of Active Investors” Supercharge your stock market game with the #1 “News and Everything Else” trading tool: Benzinga Pro – Click here to start your 14-day trial now!
This article Walmart Joins Target Aiming to Send Not-So-Merry-and-Bright Holiday Vibes was originally published on Benzinga.com.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.