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Walmart’s Q3 earnings beat expectations

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BENTONVILLE, Ark. – Walmart on Tuesday reported fiscal third quarter net income of $3.30 billion, down from $3.71 billion a year ago but better than what Wall Street analysts were expecting.

Walmart-supercenter-exteriorComparable-store sales increased 1.5% on a traffic increase of 1.7%. The average purchase per customer was down 0.2%, compared to a 1.2% increase in the third quarter of fiscal 2015.

Doug McMillon, Walmart’s chief executive officer, said the increased comps and traffic indicate that the retailer’s efforts to make its stores more attractive are paying off. Sales at U.S. stores totaled $72.7 billion in the quarter, up 3.8% from a year ago.

Comparable-store sales at the retailer’s smaller-format Neighborhood Markets increased 8% in the quarter.

E-commerce sales were another bright spot, increasing by 10% from a year earlier.

“We are pleased with the continued sales growth in Walmart U.S. and in our international business. Strong traffic and our fifth consecutive quarter of positive comps in Walmart U.S. stores show we are taking the right steps to win with customers,” McMillon remarked in a statement. “Although we still have work to do, we are positioning for sustainable growth through investments in people and technology to deliver a seamless shopping experience at scale.”

Walmart’s per share earnings of $1.03 exceed the 98 cents that was the consensus analysts estimate, although quarterly revenue of $117.4 billion was below the consensus estimate of $117.8 billion and down from the $119 billion Walmart reported in last year’s third quarter.

Walmart U.S. operating income fell 8.6% to $4.5 billion on increased expenses from adding employees and raising wages. Walmart this year announced plans to invest $1 billion in new employees, higher wages and additional training.

Sam’s Club posted sales of $14.1 billion, down 2.2%. However, operating income rose 9.3% to $539 million.

Walmart International had sales of $29.8 billion, down 11.4%, with operating income of $1.3 billion down 6.4%.

The company narrowed its full-year per share earnings estimate to between $4.50 and $4.65 from between $4.40 and $4.70.


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