Exceeding expectations! Walmart's third-quarter revenue is $152.81 billion, and its stock price rose 5%!

It is learned that on November 15, Walmart announced its financial results for the third quarter of 2022. As grocery demand remained strong and inventory of clothing and electronics declined, the retail giant's earnings exceeded expectations this quarter. After the financial report was released, Walmart's stock price rose sharply, with an increase of nearly 5%.

Third quarter performance

• Revenue was $152.81 billion, up 8.7% year-on-year, and was expected to be $147.75 billion.
• Net sales increased 8.8% year-over-year to $151.47 billion;
• Operating profit fell 53.5% year-on-year to $2.7 billion;
• Net loss of $1.77 billion, compared with a net profit of $3.13 billion in the same period last year;
• Adjusted earnings per share were $1.50, compared with expectations of $1.32.

Walmart CEO Doug McMillon said on the earnings call that in addition to strong grocery sales, Walmart's performance in the third quarter was also boosted by the U.S. back-to-school season and global sales events, including Flipkart's (Indian e-commerce giant, owned by Walmart) "The Big Billion Days" promotion.

In the third quarter, Walmart's U.S. e-commerce sales increased by 16% year-on-year, and the cumulative growth over the past two years was 24%. As its online market share increased, Walmart's advertising business also achieved strong performance. In the third quarter, Walmart's global advertising revenue increased by more than 30% year-on-year.

Walmart Chief Financial Officer John David Rainey said Americans' wallets are stretched because of inflation. They are buying lower-priced proteins like hot dogs, beans and peanut butter instead of pricier meats. They are buying lower-priced baby products and baking supplies, including more of Walmart's own brands. They are waiting for sales events to buy items like TVs and air fryers. At the same time, they are spending less on apparel and home furnishings.

The big retailer attracted more high-income shoppers in the third quarter. About 75% of its food market share growth came from households with annual incomes of more than $100,000. This trend also occurred in the previous quarter. In addition, Walmart's inventory overhang problem has also eased. Walmart's inventory increased by 13% year-on-year in the third quarter, down from 26% in the second quarter and 32% in the first quarter.

By department, Walmart's U.S. sales increased 8.2% year-on-year in the third quarter, and the cumulative growth in two years was 17.4%; Sam's Club sales increased 10% year-on-year, and sales increased 23.9% in two years; membership income increased 8%, and the number of members reached a record high; Walmart International's net sales were US$25.3 billion, a year-on-year increase of 7.1%. Walmart's global advertising business grew by more than 30%, with Walmart Connect in the United States growing by 40%, and Flipkart Ads also performing strongly.

Walmart is "cautious" about holiday sales as the global economy is full of uncertainty and the U.S. inflation rate is close to its highest point in four decades. For the fourth quarter financial results, Walmart expects consolidated net sales to increase by about 3%; Walmart's U.S. consolidated sales (excluding fuel) are about 3%; consolidated operating income is expected to increase by 1.0% to 1.0% year-on-year; and adjusted earnings per share will decrease by 3% to 5%. For fiscal 2022, consolidated net sales increased by 5.5%, while the general expectation is an increase of 5.06%. Walmart's U.S. consolidated sales (excluding fuel) increased by about 5.5%; consolidated adjusted operating income decreased by 6.5% to 7.5%, an improvement from the company's previous guidance of a decrease.

Editor ✎ Nicole/

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