American retailer Walmart published a report for the third quarter of 2022 fiscal year. The results were better than analysts' expectations, and the company raised its profit forecast for the fiscal year.
Revenue. Compared to last year, total revenue increased by 4%, up to 141 billion dollars. US Walmart Sales Increase by 9%, number of transactions - per 6%. But in foreign stores, sales decreased by 20%, since the company sold part of its outlets in Japan, Argentina and UK.
Like many, Walmart faces supply disruptions. In order not to be left with empty shelves on holidays, the company even chartered its own ships. As a result, due to rising costs, Walmart's gross margin fell by 0,4%, to 24,6%. It is relatively little, because other retailers, for example Amazon, cope with failures much worse.
Despite high inflation, Walmart wants to maintain the image of an inexpensive store and does not pass the cost on to customers. So, compared to last year, the average check in American supermarkets grew by only 3%. In this way, the company expects to take part of the market from competitors..
“In the fight against inflation, we are always on the side of buyers. Our scale and wide range of products allow us to work like this, to be beneficial to customers, and shareholders", Walmart said.
Profit. Net profit fell by 40%, up to 3 billion dollars. Primarily due to various non-operating expenses. For example, the company repaid part of the debts ahead of schedule. Adjusted earnings per share, however, increased by 8%, to 1,45 $.
Forecast. Walmart said, that while there are no signs of a fall in consumer demand. For example, shoppers have not started choosing smaller containers or cheaper brands. The company raised its forecast for adjusted earnings per share for this fiscal year from 6.2-6.35 to 6,4 $ and expects strong sales in the next quarter. To deal with the holiday rush, Walmart even increased its stock by 11%.
Promotions. Despite a good report, during the day, WMT shares fell by 2,5%, to 143,2 $. There are a couple of reasons for this., albeit insignificant.
The first is the reduction in gross margin. Profitability has not fallen so much, because attendance and average check increased. But the figure was still below analysts' expectations.: 24,6 against 25,2%.
The second is the slower growth of e-sales in the US., just for 8%. This slowdown can be partly explained by the high base effect. A year ago, during the quarantine, Walmart's digital sales grew by 79%. Now it's harder for the company to surpass its last year's growth rate..
