Walmart posts modest 3Q sales, comp growth

Wal-Mart Stores said Thursday that U.S. sales increased by 2.5% during the third quarter and comparable-store sales improved by 1.2% as traffic and average ticket increased as a result of improvements in price positioning and store conditions.

The sales results were slightly below consensus analyst expectations, while comps were down sequentially from the second quarter, although within Walmart’s 1% to 1.5% expected range. Walmart maintained U.S. comp guidance in the same range for the fourth quarter.

In U.S. Supercenters and Neighborhood Market stores, sales for the period totaled $74.6 billion, and operating income of $4 billion was down by 11.3%. The 1.2% U.S. comp increase reflected a 0.7% increase in store traffic and a 0.5% increase in average ticket, officials said. Comps at Neighborhood Market stores improved by 5.2% in the period. Customer experience in stores as measured by internal surveys continued to improve in the quarter, the company added.

Walmart said the operating income decline resulted from increased expenses for employee training initiatives and technology, as well as lapping a lease accounting adjustment in last year's third quarter. 

“As we continue to execute our plan, we’re making good progress, and I am pleased with the continued momentum across Walmart U.S.,” Greg Foran, Walmart’s U.S. CEO, said in a statement. “We’re focused on delivering a better shopping experience to our customers, investing in price and broadening our assortment — in stores and online. As we head into the fourth quarter, we’re well-positioned for the holiday with exciting gift items and everyday low prices throughout the assortment. All the pieces are in place to ensure a great holiday shopping experience in our stores and online.”

Companywide online sales increased by 20.6% at constant currency rates during the quarter.

Walmart’s Sam’s Club division reported $14.2 billion in sales, a 1.1% increase, while non-fuel comps at Sam’s increased by 1.4%, reflecting higher average ticket but a 0.5% decline in shopper traffic. Operating income for Sam’s was down by 26.5% in the quarter.

Walmart International sales were down by 4.8% to $28.4 billion in the quarter, but up by 2.4% on a constant-currency basis. Operating income in that division increased by 11.2%.

“We are pleased that we can see real progress stemming from our strategic choices and we appreciate the great work by our associates,” Doug McMillon, Walmart’s CEO, said in a statement. “Yet, we are not satisfied. We will continue to change and pick up speed to reach our longer term aspirations.”

Excluding currency impact, Walmart delivered total revenue of $120.3 billion, an increase of 2.5% over last year, and operating income of $5.25 billion, an 8.1% decrease. Earnings per share of 98 cents exceeded estimates by 2 cents.