Home Walmart Planning Some Price Rollbacks After Strong Q3
November 16, 2023

Walmart Planning Some Price Rollbacks After Strong Q3

Walmart surpassed third-quarter Wall Street estimates as earnings and revenue gained while some product costs, including in general merchandise, moderated.

The company posted net income of $453 million, or 17 cents per diluted share, versus a loss of $1.8 billion, or 66 cents per diluted share, in the year-previous period. Adjusted for one-time events, earnings per diluted share increased to $1.53 from $1.50 in the quarter year over year.

A MarketBeat-published analyst consensus estimate anticipated adjusted diluted earnings per share of $1.52 and revenues of $159.65 billion.

Comps gained 4.7% in the quarter year over year without the effect of fuel sales, according to Walmart. Net sales were $159.44 billion and net revenues, including memberships and other income were $160.8 billion versus $151.47 billion and $152.81 billion, respectively, in the year-earlier period. Operating income was $6.2 billion versus $2.7 billion in the year-prior quarter, when adjustments for one-time events pushed the figure up to $6 billion.

At Walmart U.S., comps gained 4.9% year over year in the quarter with transactions up 3.4% and average ticket up 1.5%. E-commerce contribution to comps was about 300 basis points. Net sales were up 4.4% to $109.4 billion as operating income slipped 2.2% to $50 million versus the year-before period.

At Sam’s Club, comps gained 3.8% year over year in the quarter with transactions up 4% and average ticket down 0.2%. E-commerce contribution to comps was 170 basis points. Net sales were up 2.8% to $22 billion as operating income advanced 5.5% to $600 million from the year-past period, Walmart reported.

Doug McMillon, Walmart president and CEO, speaking in a conference call, said “Across markets, the team did a nice job driving our seasonal events. Our in-stock and inventory levels are in good shape. We finished down 1.2% in inventory for the total company, including down 5% for Walmart U.S. Both our top line and adjusted EPS came in better then what we projected at the beginning of the quarter, but we could have done a better job on expenses.”

On the general merchandise side, McMillon said some costs are declining, which will give Walmart the opportunity to provide price rollbacks for the holiday season. He added 2024 might experience a deflationary period across many product categories, for which some general merchandise segments, as well as food segments such as dairy, chicken and seafood, have become less costly while prices on other categories, such as grocery and everyday needs, have been slower to drop. McMillon said the company welcomed some deflation as it would provide an opportunity to manage in such a way as to improve shopper satisfaction.

McMillon also pointed out the company’s e-commerce sales advanced 24% in Walmart U.S.,16% at Sam’s Club U.S. and 15% globally. Marketplace and its third-party sellers are an important part of Walmart’s plans to advance e-commerce and provide a wider selection, he maintained.

“We had strong revenue growth across segments for the quarter, and we’re excited to get an early start to the holiday season,” McMillon said. “(From a) Thanksgiving meal that costs less than last year, to great prices on fashion, toys, electronics, and seasonal decorations, we’re here to help families from around the world make this a special time. Looking ahead, our inventory is in good shape, the teams are focused, and our associates are ready to serve our customers and members whenever and however they want to be served.”

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