Walmart sales beat forecasts, helped by Asda
By Iain Gilbert
Date: Thursday 15 Nov 2018
(Sharecast News) - Walmart turned in a stronger-than-expected set of sales figures ahead of the all-important holiday season, leading the retailer to boost its full-year outlook and put rival Amazon on notice.
UK-based grocery arm Asda, which is looking to merge with rival Sainsbury's, delivered a like-for-like sales growth of 2.0%, a sixth consecutive quarter of positive sales to contribute to the wider group.
Quarterly revenues for Walmart as a whole of $124.9bn were up 1.4% year on year as LFL sales rose 3.4% across the US in the third quarter, topping analysts' estimates of a 3.1% increase.
Net income for the quarter came to $1.71bn, or $0.58 on a per share basis, down 2% on the same quarter last year. On an adjusted basis, EPS came to $1.08 - ahead of the $1.01 forecast by Wall Street analysts.
Walmart management now expect LFL sales in the US to grow at least 3% for the full year, slightly above its previous guidance of "about 3%", with the full-year outlook for adjusted EPS also boosted to $4.75-4.85 from $4.65-4.80 earlier.
Internet sales grew 43% in the US, ahead of Walmart's full-year forecast, as the retailer continues its efforts to do battle with eCommerce giant Amazon.
Walmart chief executive Doug McMillon said he was optimistic regarding the upcoming holiday trading period, noting "momentum in the business" and a benefit from a favourable economic environment in the US.
On Asda, he noted that online grocery sales outpaced the market, according to Kantar. "Additionally, we received follow-up communication from the competition authorities related to the proposed merger of Asda and Sainsbury's. This latest statement was in-line with our expectations, and we will continue to proactively work through the process with the CMA."
Asda CEO Roger Burnley said the UK business had welcomed an additional 115,000 customers through its doors to outperform the market for the second quarter running.
"During the quarter we continued to grow our distinct own brand offer, including the expansion of our Free From range to include 113 new lines, as well as expand scan and go to 192 stores," he said, also pointing out that a first two 'food re-distribution centres' had opened in the East Midlands and Leeds as part of a programme with foodbank operator Trussell Trust.
As of 1345 GMT, Walmart shares had picked up 0.98% in pre-market trading to $102.52 each.
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