Walmart's online sales boom drives up profits

'We're prepared for a good holiday season,' CEO says

Walmart reported booming online sales and raised its outlook for the year, sending shares higher.

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Earnings at the world's largest retailer topped Wall Street projections for the three months through October, according to financial statements released Thursday, and Walmart raised its full-year sales forecast as it prepares for the crucial holiday season.

The Bentonville, Ark.-based company earned profit of $3.29 billion, beating the $3.1 billion that analysts projected. Adjusted earnings of $1.16 topped the $1.09 average estimate in a survey by Refinitiv.

TickerSecurityLastChangeChange %
WMTWALMART INC.119.78+1.12+0.94%

Revenue came in at $128 billion, up 2.5 percent versus a year ago, but lagging the $128.6 billion that analysts were anticipating.

The retail giant said U.S. comparable-store sales rose 3.2 percent, excluding fuel, beating the 3.1 percent growth that was expected. Online sales jumped 41 percent amid strength in groceries.

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"We continue to see good traffic in our stores," CEO Doug McMillon said. "We’re growing market share in key food and consumables categories, including fresh, and we had positive comps in general merchandise."

Sam's Club, the membership business that offers discounts for bulk purchases, saw a 0.6 increase in comparable-store sales compared with the previous year as its e-commerce business grew 32 percent.

Walmart International sales rose 1.3 percent versus a year ago, despite Britain's plans to leave the European Union continuing to "negatively affect customer spending patterns." Unrest in Chile "seriously affected" business in the country, Walmart said.

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Walmart said its next-day delivery service now covers about 75 percent of the U.S. population. The retailer has been engaged in a delivery race against Amazon to provide consumers with the fastest service possible at the lowest price.

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"Looking ahead, we're prepared for a good holiday season," McMillon said.

Walmart now expects high single-digit gains in full-year adjusted earnings per share, excluding Flipkart. Previously, the company said adjusted earnings would be up or down slightly. Wall Street analysts were looking for 0.3 percent growth.

The company's shares have climbed more than 29 percent this year.