Walmart surges with sales growth at post-recession high
Shares in Walmart soared to an all-time high Thursday after the chain delivered its strongest U.S. sales gain in more than eight years, helping the retailer keep pace with rival Amazon.com as the crucial holiday season begins.
Walmart’s surge came a day after its rival Target offered a cautious forecast that overshadowed progress it has made in bringing more customers to its stores.
Comparable sales at domestic Walmart stores grew 2.7 percent in the third quarter, the company said on Thursday, beating the increase projected by analysts. It also boosted its earnings forecast for the full year, sending the shares on their biggest rally in more than nine years.
The results added fresh evidence that Wal-Mart Stores’ resurgence is here to stay. The e-commerce business saw gross merchandise volume — a measure of all the goods it sells online — soar 54 percent in the quarter, a sign it may be chipping away at Amazon’s dominance.
The online growth figure now includes sales from Jet.com, which it acquired in the third quarter of last year.
It was “a monster third quarter,” Gordon Haskett analyst Chuck Grom said in a note. “The bar was high, and the team from Bentonville hit it out of the park.”
Walmart shares rose 11 percent to $99.62 Thursday in New York, the highest close since the company’s public offering in 1970. The stock has gained 44 percent this year.
The world’s biggest retailer has now delivered 13 consecutive quarters of sales growth in its home market, helped by price cuts, cleaner stores and an aggressive push online. Boosting food sales has also has been key to Walmart’s rebound. Still, it faces a continued uphill fight against Amazon, which should capture about half of total holiday sales growth, according to consulting firm Bain & Co.
To draw in more upscale shoppers, Walmart has acquired brands like Bonobos and Moosejaw and announced plans this week to add products from Lord & Taylor to its website next year — part of a broader redesign of the site.
Walmart U.S. e-commerce chief Marc Lore told reporters Thursday that more deals like the Lord & Taylor pact are in the works.
“Walmart is laser-focused on growing digital sales,” said Ken Perkins, president of Retail Metrics.
E-commerce sales grew 50 percent, though Walmart has a long way to get even close to Amazon’s dominance online. Walmart said in October that U.S. e-commerce sales should be about $11.5 billion this year and it expects global e-commerce to be $17.5 billion. That’s still less than 4 percent of overall sales. That compares with Amazon’s $94.66 billion in the last calendar year.
In the third quarter, Walmart’s quarterly revenue increased 4.2 percent to $123.18 billion. The company’s profit fell to $1.75 billion, or 58 cents a share, compared with $3.03 billion, 98 cents a share, a year ago as it took charges for paying down debt early and a bribery probe settlement.