Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Walmart forecasts promising holiday season as online sales soar

Stock MarketsNov 17, 2020 01:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A shopper is seen wearing a mask while shopping at a Walmart store in Bradford, Pennsylvania

By Melissa Fares and Aishwarya Venugopal

(Reuters) - Walmart Inc (N:WMT) said on Tuesday it was optimistic about its holiday sales prospects in a pandemic-ridden year after the big-box retailer beat Wall Street expectations for quarterly results as Americans increasingly shift their spending online.

The surge in demand for essentials seen at the peak of the coronavirus lockdowns has carried into the second half of the year, with consumers relying on its same-day delivery and store pick-up services to buy everything from groceries to sporting goods.

This helped its U.S. e-commerce sales grow 79% with strong results across all channels and helped boost same-store sales and profit margins.

"I'm a believer that with more investment in online ... Walmart is an even better buy than it is now," said David Harden, President and Chief Investment Officer at Summit Global Investments.Walmart has doubled down on its investments in e-commerce and in September launched a subscription service Walmart Plus, touted as a rival to Amazon.com's (O:AMZN) Prime subscription, which includes perks like free shipping and streaming services.

The company did not disclose any metrics about the new service that costs $98 per year and offers services such as unlimited free delivery, fuel discounts and no checkout lines.

The COVID-19 pandemic has also forced retailers to drastically rethink how they do business during the key holiday season, with many big retailers including Walmart, Kohl's (N:KSS), Target (N:TGT), and Best Buy (N:BBY) moving their promotions to as early as October.

"This holiday season will obviously be unique ... While many family gatherings may be smaller, we do believe families want to decorate, celebrate and enjoy food and gifts," Chief Executive Officer Doug McMillon said on a call with analysts.

An early start to the holiday season has helped Bentonville, Arkansas-based Walmart give "customers the opportunity to come to stores when they aren't as crowded as they typically would be on a one-day Black Friday type of event," Chief Financial Officer Brett Biggs told Reuters.

Still executives warned of continued pressure from COVID-19 related expenses. It incurred about $600 million in additional costs that included higher wages for warehouse workers and bonuses for store employees in the quarter and about $1.5 billion in such expenses in the prior quarter.

With COVID-19 cases rising in much of the United States and across the world that has forced countries like the UK to go into another lockdown, CEO McMillon said that Walmart was reinforcing safety procedures and has resumed limiting the number of shoppers allowed in stores at one time.

Walmart also said that it had begun to see consumers stocking up again on paper goods, cleaning supplies and dry grocery, and said would be able to respond in this instance better than it did at the start of the pandemic, but cautioned that supply chain was "still stressed in some places."

Shares were down marginally at $151.95. They have risen 28% this year.

McMillon also called for Washington to help small businesses get through the next phase of the pandemic, while congratulating U.S. President-elect Joe Biden on his victory, saying that he was looking forward to working with the administration.

Sales at U.S. stores open at least a year rose 6.4%, excluding fuel, in the third quarter ended Oct. 31. Analysts had estimated an increase of 4.16%, according to IBES data from Refinitiv.

Operating income jumped 22.5% to $5.79 billion in the third quarter, while Walmart reported adjusted earnings per share of $1.34 that topped expectations for $1.18.

Total revenue rose 5.2% to $134.71 billion, beating estimates for $132.23 billion.

Walmart forecasts promising holiday season as online sales soar
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Napat Limboot
Napat Limboot Nov 17, 2020 1:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
😔
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email