Walmart’s third quarter net earnings took a hit because of equity investment charges related to JD.com and an opioid lawsuit settlement, but adjusted earnings per share and revenues beat Wall Street estimates.
Consolidated net loss was $1.8 billion, or 66 cents per diluted share, versus consolidated net income of $3.11 billion, or 1.11 per diluted share, in the year-previous period. Adjusted for one-time events, earnings per share were $1.50 versus $1.45 in the year-before period, the company stated.
Adjusted earnings per share beat a Yahoo Finance-published analyst consensus estimate of $1.32 while revenues beat an estimate of $147.75 billion.
Not counting the effect of fuel operations, Walmart U.S. comparable sales were up 8.5% in the quarter year over year with Walmart up 8.2% and Sam’s Club up 10%, the company maintained. At Walmart stores, transactions were up 2.1%, and average ticket was up 6%. E-commerce contributed about 80 basis points to the comp figure. At Sam’s Club transactions were up 4.8% and average ticket was up 4.9%. E-commerce contributed 120 basis points to the Sam’s comp.
Walmart net sales for the quarter were $151.47 billion, and net revenues, including membership fees and other income, were $152.81 billion versus $139.21 billion and $140.53 billion, respectively, in the year-prior period. Operating income was $2.7 billion versus $5.79 billion in the year-earlier quarter. Adjusted operating income was $6.1 billion versus $5.8 billion in the year-prior period.
In a conference call, Doug McMillon, Walmart president and CEO, said the company is currently enjoy good customer response, with previously infrequent shoppers visiting more often, “including higher income customers.” The company is addressing inventory levels. McMillon added, by being conservative in some operations and aggressively dealing in others while controlling costs and scaling capabilities relevant to the company’s larger business, including marketplace, advertising and fulfillment. He said promotions worldwide, including back-to-school seasons and Deals for Days initiatives in the third quarter, got a good reception.
Repeat business from customers who are now shopping more frequently is something that Walmart is targeting by emphasizing presentation of fresh food, in one key category, and strong execution of services such as pickup. The company also will push Walmart+ memberships in the U.S. for occasional and all other customers, while encouraging app adoption worldwide.
In the conference call, John David Rainey, Walmart CFO, noted general merchandise sales declined in the low single digit with weakness in electronics, home and apparel. E-commerce accelerated sequentially to 16% growth even as store transactions gained.
