Walmart tops forecasts, raises outlook going into holidays
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Walmart reports its quarterly earnings on Nov. 20. Photo: David Paul Morris/Bloomberg via Getty Images
Walmart raised its full-year outlook after another strong quarter, powered by double-digit e-commerce growth, as outgoing CEO Doug McMillon prepares to hand off to U.S. president John Furner.
Why it matters: The results underscore Walmart's transformation from a low-price superstore into a tech-driven global powerhouse.
The big picture: Walmart continues to gain grocery share across both its mainline stores and Sam's Club, as it attracts both value-seeking and higher-income shoppers.
- The company is investing heavily in AI-powered shopping and personalization tools to make its online experience more intuitive and predictive.
- Last month it unveiled an OpenAI partnership to let shoppers check out directly through ChatGPT.
Zoom in: CFO John David Rainey said on a conference call with analysts that Walmart is using AI "across the organization to manage costs effectively and accelerate growth," noting more than half of e-commerce fulfillment-center volume is now automated.
By the numbers: Third-quarter revenue was $179.5 billion, up 5.8% year-over-year, topping Wall Street estimates.
- E-commerce sales were up 27% globally, including 28% in the U.S.
- Advertising revenue rose by 53%, boosted by the acquisition of TV maker Vizio; Walmart Connect U.S. grew 33%.
- Membership and other income grew 9%.
The intrigue: Executives said Walmart currently has 7,400 active rollbacks, with most of the price cuts in grocery.
- "In terms of the impact of tariffs, certainly, I think we have seen less impact than what we thought we would have expected early in the year," Furner said during the earnings call. "Really, the only price pressure that we're seeing in food generally right now is in the beef category."
Of note: Walmart also said it will move its stock listing from the NYSE to Nasdaq as of Dec. 9, which Rainey said aligns with the "people-led, tech-powered approach to our long-term strategy."
- The switch is considered more symbolic than market-moving.
- Since McMillon took over as CEO in early 2014, Walmart's stock has quadrupled, doubling the performance of the retail sector's main players over that time.
What's next: Walmart expects full-year sales to rise 4.8% to 5.1% and adjusted operating income to grow 4.8% to 5.5%, signaling confidence heading into the holidays.
- It's the second time in three months the retailer has raised its sales outlook for the year.
- Walmart shares were up about 5% in early trading.
Editor's note: This story was updated with additional information throughout.
