Why Walmart Is In Better Position To Take On The Rest The Year

Walmart (WMT) had another stellar quarter amid the pandemic, with revenues reaching $134.7 billion, up $6.7 billion or 5.2% over Q2, according to its Q3 earnings call Tuesday morning.

While Q3 started off soft due to a slow Back to School season and reduced stimulus spending, the quarter picked back up in the fall.

Overall, consumers made fewer trips to Walmart stores, but those trips yielded larger transactions for the company. The retail giant saw its comp sale rise in the U.S. by 6.4% with increases in general merchandise, health and wellness, and food purchases.

Walmart said its e-commerce sales grew by 79%, adding about 570 basis points to its comp sales. Sam’s Club e-commerce sales also grew by 41%. The retailer attributed the growth to the change in consumer habits during the pandemic and the ability for consumers to buy online, pickup in-store, curbside, or have products shipped home.

“This was another strong quarter on the top and bottom line,” Doug McMillon, Walmart president and CEO, said in a statement.

Walmart also touched on its future amid the pandemic during its Q3 earnings report, saying that the next quarter will feel very different. It is still seeing consumers stocking up supplies amid the COVID crisis, which is stretching the supply chain, but it said it is better positioned to handle the demand than it was in the early days of the pandemic.

“We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula,” McMillon said on the call. “Customers will want to be served in a variety of ways and we’re positioned to save them money, provide the variety of product choices they’re looking for, and deliver the experience they choose in the moment.”

Walmart said it is encouraged about the fourth quarter of 2020 but declined to provide guidance for the full year, citing the impact of the pandemic.

The retailer also said it feels well-positioned for the holiday shopping season with its month-long sales events – Deals for Days – that will allow consumers to shop its omnichannel all month long.

“While many family gatherings may be smaller, we do believe families want to decorate, celebrate, and enjoy food and gifts,” McMillon said. “They want a sense of normalcy, and our traditions help bring some joy and comfort to this difficult year.”

Walmart also reported net sales at Walmart International as $29.6 billion, up 1.3% compared to a year earlier, led by Flipkart, Canada, and Walmex.

After releasing its earnings report, Walmart shares were trading at $151.76 as of 10:09 a.m. EST on Tuesday, down $0.68 or 0.44%.