Walmart raises outlook as more US shoppers hunt deals

Walmart delivered another standout quarter, posting strong sales and profits that blew past Wall Street expectations as it wins over more cash-strapped Americans who have grown increasingly anxious about the economy.

With other retailers dialling back projections, the nation’s largest retailer raised its financial outlook Thursday after its strong third quarter, setting itself up for a strong holiday shopping season.

Walmart Inc., based in Bentonville, Arkansas, also said Thursday that it will be transferring the listing of its common stock to the tech-heavy Nasdaq from the New York Stock Exchange. It expects its common stock to begin trading on the Nasdaq Global Select Market on December 9, under the same ticker symbol “WMT”.

CEO Doug McMillon, who surprised investors with plans to retire early next year, has reshaped Walmart itself as a tech-powered retail giant that has leaned heavily into automation and artificial intelligence.

McMillon spearheaded a period of robust sales growth since becoming chief executive in 2014, going toe-to-toe with online behemoth Amazon, and plans to retire early next year. John Furner, 51, the head of Walmart’s US operations, will take over on February 1, the day after McMillon’s retirement becomes effective, the company said.

The leadership change at Walmart arrives at a challenging time for retailers and other US companies. They have spent months navigating an uncertain economic environment as President Donald Trump’s administration imposes wide-ranging tariffs on imports and pursues an immigration crackdown that has threatened to shrink the number of workers available in America.

Walmart’s performance serves as a barometer of consumer spending given its size and vast customer base. The company maintains that 90 per cent of US households rely on Walmart for a range of products, and more than 150 million customers shop on its website or in its stores every week.

So analysts will be focusing on consumer health heading into the holiday shopping season and more details on how Furner will fill the hole that will be left by McMillon. Analysts expect Furner to continue the strategies pushed forward by McMillon.

Under McMillon’s leadership, Walmart has been laser-focused on maintaining low prices while embracing new technology like artificial intelligence and robotics. Walmart has also invested heavily in e-commerce and faster deliveries under McMillon’s stewardship.

Walmart has also looked for new sources of revenue like advertising and launched a membership programme called Walmart+ to compete with Amazon Prime, its rival’s free shipping programme.

Such strategies have helped bolster Walmart’s results in the latest quarter.

Third-quarter profits rose to US$6.1 billion, or 77 cents per share, in the quarter ended October. That compares with US$4.6 billion, or 57 cents per share, a year earlier.

Adjusted earnings were 66 cents for the quarter.

Sales rose nearly 6.0 per cent to US$179.5 billion, up from US$169.6 billion in the year-ago period.

Analysts were forecasting a profit of 60 cents on sales of US$177.4 billion, according to FactSet.

Comparable sales – those from established physical stores and online channels – at US namesake stores rose 4.5 per cent in the fiscal third quarter. In the previous quarter, sales for that measure were up 4.6 per cent.

Global e-commerce sales rose 27 per cent. That follows a 25 per cent jump in the second quarter and a 22 per cent growth in the first quarter.

The company said that it now expects adjusted profits per share for the fiscal year to be in the range of US$2.58 to US$2.63, up from the early guidance offered in August of US$2.52 to US$2.62 per share.

It also said that it expects sales for the year to be up anywhere from 4.8 per cent to 5.1 per cent. That is up from its earlier estimates of 3.75 per cent to 4.75 per cent.

Analysts were predicting US$2.61 per share, according to FactSet analysts.

– AP