The good times keep rolling on at Walmart (WMT), as inflation-weary shoppers continue to search for value.
On Tuesday, the world’s biggest retailer posted fiscal third quarter results that easily beat Wall Street expectations. Sales of $169.59 billion topped analyst estimates for $167.5 billion. Adjusted earnings per share eclipsed estimates by $0.05 at $0.58.
“We had a really strong quarter,” Walmart CFO John David Rainey told Yahoo Finance, noting that e-commerce now makes up 18% of the business overall as consumers lean into convenience via delivery and pickup.
Walmart stock rose over 4% in early trading on Tuesday. The stock is up 65% year to date, outperforming the Dow Jones Industrial Average’s (^DJI) 14% advance.
Here’s what Walmart posted for its third quarter of fiscal year 2025 results, compared to Bloomberg consensus estimates:
Revenue: $169.59 billion versus $167.5 billion
Adjusted earnings per share: $0.58 versus $0.53
Overall same-store sales growth: 5.5% versus 3.81%
Walmart US same-store sales growth: 5.3% versus 3.68%
Foot traffic growth: 3.1% versus 2.82%
Ticket growth: 2.1% versus 1.2%
E-commerce sales growth: 22% versus 2.22%
Sam’s Club US same-store sales growth: 7% versus 4.22%
Walmart US saw same-store sales jump 5.3%, driven by more foot traffic, up 3.1%, and a higher average ticket, up 2.1%. That’s compared to a 4.9% increase it posted this time last year.
In the US, e-commerce sales jumped 22%, while its advertising unit, Walmart Connect, grew 26%. Membership income also saw a double-digit percentage increase.
The retailer notched gains across all product categories and income cohorts. Rainey said roughly 75% of its share gains came from households that are making more than $100,000 a year.
Sales in the groceries category grew by mid-single digits as “food units reached the highest level in four years” led by pantry products. Personal care and household cleaning products also saw sales growth. Its private-brand penetration rose 80 basis points as it doubled down with new lines like Bettergoods early this year.
Groceries make up about 60% of US sales for Walmart.
Walmart signaled it sees the momentum continuing for the holiday shopping season, raising its guidance for fiscal year 2025 for the third time.
Net sales are now expected to grow between 4.8% and 5.1%. Previously, Walmart guided to 3.75% to 4.75% sales growth. Coming into the year, Walmart had expected 3% to 4% sales growth.
Adjusted operating income is expected to grow between 8.5% to 9.25%, compared to previous guidance of 6.5% to 8%.
Adjusted earnings per share for the full fiscal year is pegged to come in between $2.42 and $2.47, above the high end of the previously expected range of $2.35 to $2.43.
The holiday is “off to a good start in line with our expectations,”, Rainey said. In Q4, same store sales are expected to grow between 3% to 4%.
Walmart logo is seen on a truck semitrailer on the highway in United States on July 12, 2024. (Photo by Jakub Porzycki/NurPhoto via Getty Images) ·NurPhoto via Getty Images
Walmart has maintained an edge in value, offering prices that are about 10% to 12% cheaper for an average basket of food, Goldman Sachs analyst Kate McShane told Yahoo Finance prior to the results.
Its strategy is even “giving Amazon a lot of competition,” LSEG Director of Consumer Research Jharonne Martis told Yahoo Finance ahead of the results.
“They’re giving the consumer the ability to shop the way they want to, whether it be ordering it on your mobile … and picking it up at the store on your way home or just having it delivered right there from the store to your house,” Martis said.
To that end, Walmart’s US health and wellness business grew sales by mid-teens, led by an increase in pharmacy scripts. Sales of GLP-1 drugs contributed about 1% to the segment’s sales.
The general merchandise category still saw sales softness. “Consumers are spending “less [on] general merchandise as they’re spending more on food,” Rainey said.
Alternative revenue streams like Walmart+ membership fees and its advertising channel, Walmart Connect, also continue to perform well. Membership and other income grew 16.1% year over year to $1.59 billion.
Its e-commerce marketplace is “getting very close to being profitable,” said McShane. In the quarter, global e-commerce sales grew 27% overall, boosted by store pickup and marketplace sales.
“There’s more buy-in from the investor base [in] the alternative revenue streams that Walmart’s been going after … that they are faster-growing and higher-margin businesses that should drive better profitability for the company longer term,” McShane said.
And investors are keeping an eye on Walmart International. Kathryn McLay, who previously served as the CEO of Sam’s Club, took over last September following Judith McKenna’s retirement.
The company is focusing on key markets like China, India, and Mexico and doubling down on low prices.
International revenue grew 8.0% to $30.3 billion in Q3, led by growth from Indian e-commerce firm Flipkart, which Walmart owns a majority stake in. Businesses in Mexico, known as Walmex, and China, reported strength from Sam’s Club and e-commerce.
—
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
