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Walmart Reports Mixed Q3 2019 Results, Raises Guidance

Amit Singh - Author
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Nov. 15 2018, Updated 1:56 p.m. ET

Key takeaways

Walmart (WMT) reported its earnings results for the third quarter of fiscal 2019 before the market opened on November 15. The company reported mixed results for the quarter, which ended on October 31. Its top line continued to grow YoY (year-over-year) thanks to higher comps driven by rises in its traffic and ticket sizes coupled with stellar e-commerce sales.

However, the company’s third-quarter net sales fell short of analysts’ expectation as unfavorable currency rates, the deconsolidation of its operations in Brazil, and the discontinuation of tobacco sales in certain clubs remained a drag.

Walmart has continued to expand its omnichannel offerings, with online grocery pickup services now available in ~2,100 stores. As of the third quarter of fiscal 2019, Walmart had 500 pickup towers and 600 stores offering grocery delivery.

Walmart reported a better-than-expected bottom line result during the third quarter, reflecting benefits from improved sales, lower interest expenses, a fall in its tax rate, and share repurchases. However, increased transportation costs and an adverse mix remained a drag.

Walmart raised its full-year adjusted EPS guidance to $4.75–$4.85, up from $4.65–$4.80. Walmart also raised its full-year comps outlook for its US business. Walmart’s US comps are expected to rise at least 3% in fiscal 2019. Earlier, the company had expected ~3% growth.

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Key financials

Walmart posted net sales of $124.9 billion, up 1.4% on a YoY basis. Its sales were shy of analysts’ estimate of $125.6 billion. Walmart’s e-commerce sales growth rate accelerated during the quarter and rose 43%, which is encouraging.

Walmart reported adjusted EPS of $1.08, handily surpassing analysts’ expectation of $1.01 and rising 8.0% on a YoY basis.

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