Even in challenging times, Walmart continues to deliver solid results.
The retail giant reported strong sales for the third quarter, with total revenue increasing 5.8% year-over-year and US same-store sales rising 4.5%, surpassing analysts’ expectations. Its US e-commerce division saw a 28% increase from the same period last year.
“We’re gaining market share, improving delivery speed, and managing inventory well. We’re well-positioned for a strong finish to the year and beyond that, thanks to our associates,” outgoing CEO Doug McMillon said.
McMillon is set to retire in January and be succeeded by John Furner, who heads-up the company’s US division.
Walmart is the largest retailer in the world, and more than one in four grocery dollars in the US is spent at one of Walmart stores. That scale gives the company a unique lens into the financial health of American households.
McMillon said on the call that spending among upper- and middle-income customers remains robust, though lower-income shoppers have been “under additional pressure of late.”
The chain has benefited from higher-income shoppers who are increasingly shopping at Walmart to save money, and the company has been focused on keeping prices down for consumers in the face of inflation.
McMillon said the company now has more than 7,400 active price discounts, and that more than 2,000 temporary cuts have become permanent so far this year.
Incoming CEO Furner also said that tariffs have wound up having less of an impact than the company expected earlier in the year.
Its strong results this quarter mark a bright spot in an otherwise uncertain retail sector.
“The mood music coming from the nation’s largest retailer continues to be extremely upbeat,” GlobalData managing director Neil Saunders wrote in a note to clients on Thursday.
“Walmart continues to advance both its sales line and share of the market. Of course, the tune that plays for Walmart may not be the one that plays for all retailers, which is testament to Walmart’s focus and discipline,” Saunders added.
In a way, the tough times for everyone else continue to be a boon for Walmart.
“I think Walmart is better insulated than just about anybody, given the value proposition that we have,” CFO John David Rainey said. “If there’s more pressure on the consumer, they’re only going to become more so.”
Walmart’s stock rose in premarket trading, climbing around 2.4% around an hour before the market open.
