WMT Raises Guidance Ahead of Holidays

Walmart Inc (NYSE: WMT) reported a mixed third quarter on Thursday, but guided for a big holiday sales season. Walmart has impressed Wall Street for three consecutive quarters, and analysts say the retail giant’s momentum should continue for the next several years.

Walmart reported third-quarter adjusted EPS of $1.08, beating consensus analyst estimates of $1.01. Third-quarter revenue was $124.9 billion, missing analyst expectations of $125.5 billion. Revenue was up 1.4 percent from a year ago.

U.S. same-store sales grew 3.4 percent, ahead of the 3.1 percent Wall Street expected.

After dropping to 23 percent in the fourth quarter of 2017, online sales growth continued trending in a positive direction for the third straight quarter. Walmart reported 43 percent e-commerce sales growth in the third quarter, up from 40 percent in the second quarter.

Walmart reported Sam’s Club same-store sales growth of 3.2 percent, down from a five-year high of 5 percent in the second quarter. Sam’s Club online sales were up 32 percent.

Walmart reported international sales of $29.5 billion, up 1.6 percent on a constant-currency basis. Walmart has been targeting high-growth international markets via partnerships and investments in companies like India’s Flipkart and China’s Dada-JD Daojia.

“We have momentum in the business as we execute our plan and benefit from a favorable economic environment in the U.S.,” CEO Doug McMillon says in a statement. “We’re accelerating innovation and utilizing technology to shape the future of retail.”

Looking ahead, Walmart once again raised its full-year adjusted EPS guidance from a previous range of between $4.65 and $4.80 to a new range of between $4.75 and $4.85. Walmart also adjusted its full-year same-store sales growth guidance from “about 3 percent” to “at least 3 percent.” Walmart previously said it expects full-year online sales growth of 40 percent.

Bank of America analyst Robert Ohmes says apparel, toys and grocery sales were all impressive.

“Walmart’s U.S. stores continue to perform well. (Low single-digit) grocery comps were negatively impacted by tough comparisons from last year’s hurricanes, but the two-year grocery comp stack was the strongest in nine years,” Ohmes says.

Bank of America has…

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