Strong sales, profit for Walmart seen on cusp of holiday season

NEW YORK » Walmart raised its outlook for the year after another surprisingly strong quarter as the largest retailer in the world flexed its scale to deal with rising costs and a snarled global supply chain.

Walmart rerouted goods to less congested ports, even chartered its own vessels, and said Tuesday that its inventory levels actually rose 11.5% from the same period last year. It boosted market share gains as a result, particularly with groceries, as it drew in more Americans stung by prices that are rising everywhere.

“The sharp increase in inflation has been felt by many households, especially when it comes to grocery shopping, and this has created far more churn in where consumers buy,” said Neil Saunders, managing director at GlobalData Retail. “Thanks to its solid lowprice credentials, Walmart is one of the retailers households turn to make their food budget stretch further.”

Food sales rose nearly 10% during the quarter, reflecting strong market share gains and low to midsingle digit inflation.

Walmart executives said they’re seeing beneficial gaps in pricing for groceries compared with rivals and that those gaps are wider now than before the pandemic began.

Walmart was not immune from the current inflationary pressures, however, and said Tuesday that its consolidated gross profit rate took a hit primarily due to increased supply chain costs, among other issues.

“We’re off to a good start for the holiday season and in a good position to continue delivering strong results,” Chief Financial Officer Brett Biggs said in a conference call Tuesday. “Despite the various macro and industry challenges our inventory position is good. Stores and fulfillment centers are well staffed and our price position remains strong. Customers should expect to find the items they want.”