Walmart reported strong revenue growth for the third quarter with strength across all business segments
Walmart, the world’s largest retailer, reported strong revenue growth globally, with strength in Walmart U.S., Sam’s Club U.S., Flipkart, and Walmex.
Total revenue was $152.8 billion, up 8.7%, or 9.8% in constant currency. Walmart U.S. sales grew 8.2% and 17.4% on atwo year stack.
eCommerce segment growth was 16% and 24% on a two-year stack and continued to gain market share in grocery. Sam’s Club sales increased 10.0%, and 23.9% over the last two years.
Membership income increased 8.0% with membercount reaching an all-time high. Walmart International net sales were$25.3 billion, an increase of $1.7 billion, or 7.1%, negatively affected by $1.5 billion from currency fluctuations.
Segment operating income led by double-digit growth for Walmex. Global advertising business grew over 30%, led by 40% at Walmart Connect in the U.S. and strength in Flipkart Ads.
Consolidated gross profit rate declined 89 basis points, primarily due to markdowns and mix of sales in the U.S., an inflation-related LIFO charge at Sam’s Club, and the timing of Flipkart’s annual event, The Big Billion Days.
“We had agood quarter with strong top-line growth globally led by Walmart and Sam’s Club U.S., along with Flipkart and Walmex. Walmart U.S. continued to gain market share in grocery, helped by unit growth in our food business.
We significantly improved our inventory position in Q3, and we’ll continue to make progress as we end the year. From The Big Billion Days in India, through our Deals for Days events in the U.S. and a Thanksgiving meal that will cost the same as last year, we’re here to help make this an affordable and special time for families around the world.
We have an amazing group of associates that make all this happen, and I want to say thank you,” Doug McMillon President and CEO.
Walmart consolidated operating expenses as a percentage of net sales increased 144 basis points due to charges of $3.3 billion related to opioid legal settlements.
Adjusted operating expenses as a percentage of net sales decreased 75 basis points, primarily due to strong sales growth and lower Covid-related costs.
Consolidated operating income was$ 2.7 billion, a decrease of 53.5%, including the legal charges described above. Adjusted operating income was $6.0 billion, an increase of 3.9%.
Adjusted EPS of $1.50 excludes the effects, net of tax, of $1.11 from net losses on equity and other investments and $1.05 from charges related to opioid legal settlements.
Subsequent to the third quarter the Company approved a new $20 billion share repurchase authorization replacing its existing authorization, which had approximately $1.9 billion remaining at the end of Q3.
Fourth quarter outlook
• Consolidated net sales growth of about 3.0%, negatively affected by approximately $1.3 billion from currency fluctuations.
• Walmart U.S. comp sales, excluding fuel, of about 3.0%.
• Consolidated operating income increase 1.0% to decline 1.0%
• Adjusted earnings per share decline of 3.0% to 5.0%.
Fiscal Year 2023
The company raises full-year outlook to reflect third quarter performance:
• Consolidated net sales growth of about 5.5%. Excluding divestitures, consolidated net sales growth of about 6.5%. Based on current exchange rates, the company expects a headwind of about $4.1 billion for the year.
• Walmart U.S. comp sales growth, excluding fuel, of about 5.5%.
• Consolidated adjusted operating income decline of 6.5% to 7.5%, which improved from the company’s prior guidance of a decline of 9.0% to 11.0% and reflects better performance in the third quarter. Excluding divestitures, consolidated adjusted operating income decline of 5.5% to 6.5%.
• Adjusted earnings per share decline of 6.0% to 7.0%. Excluding divestitures, adjusted earnings per share decline of 5.0% to 6.0%.