Walmart flexes muscle against Amazon

NEW YORK—Walmart may be bruised by Amazon, but it’s learning how to fight back.

The world’s largest retailer delivered strong third-quarter results Thursday, extending a streak of sales growth into its 11th straight quarter that was helped by services such as online grocery pickup. It also raised profit expectations for the year heading into the holiday shopping season.

Like other retailers, Walmart is benefiting from a strong job market and rising consumer confidence. But retailers are also benefiting from the misfortunes of others. Toys R Us and BonTon Stores have gone out of business, while the Sears bankruptcy is creating more opportunities to grab sales. J.C. Penney, still floundering, on Thursday withdrew profit guidance and lowered its sales expectations for the year.

Walmart posted strong sales across a wide range of products from toys and back-to-school items to fresh food. That helped sales at stores open at least a year rise 3.4 percent, a bit slower from the previous quarter’s 4.5 percent at Walmart’s U.S. division, which marked its best performance in more than a decade. The measure, an indicator of a retailer’s health, was helped by a 1.2 percent increase in customer traffic and a 2.2 percent increase in transactions.

Since buying Jet.com two years ago, Walmart has been expanding online by acquiring brands and adding thousands of items. It’s also been ramping up grocery delivery and pickup options. Grocery pickup is now offered at nearly 2,100 of its 4,700 U.S. stores, while grocery delivery is available in nearly 600 locations. Walmart has also revamped its website with a focus on fashion and home furnishings. That all helped to drive a 43 percent increase in online sales in the U.S. during the latest quarter. That was up from a 40 percent increase in the second quarter and a 33 percent increase in the first quarter.

Still, Walmart’s online sales remain a fraction of Amazon’s online global merchandise empire, which hit $108 billion last year. Walmart’s U.S. online business was a mere $11.5 billion.

A visit to a Walmart store in Houston last week showed generous holiday merchandise offerings such as expanded toy aisles with large interactive toy ponies and Barbie dream campers, each selling for nearly $400. Shoes are now unboxed and hang on racks to make it easier for shoppers to find them.