Walmart (WMT), the world’s largest retailer, reported stronger-than-expected earnings on Thursday, driven by strength in the e-commerce business.
For the third quarter, the big-box retailer reported adjusted earnings per share of $1.08, beating analysts’ forecasts of $1.01 per share.
Comparable store sales, ex-fuel, for the third quarter grew at 3.4%. This was stronger than the 2.9% expected by analysts. However, net revenue for the quarter came in at $124.9 billion, missing analysts estimates of $125.49 billion.
Walmart raised its guidance for the full-year fiscal 2019 to $4.75 to $4.85 adjusted EPS.
“We continue to see strong comp store sales,” CEO Doug McMillan said in a statement. “Our results reflect not only value our customers are finding in our offer, and a lot of hard work from the team, but certainly some macro tailwinds as well, especially in the U.S.”
Walmart’s e-commerce business continues to be a bright spot, with U.S. e-commerce sales growing 43% during the quarter.
“We’re primarily focused on the fundamentals of the business, but we’re also playing offense and innovating with Store No8,” McMillon said in his management commentary. “Our Customer Value Index score is running ahead of the aggressive plan we set for this year, led by progress we’re making on the Have it and Deliver it metrics. We’re expanding same-day delivery options through omnichannel capabilities and with Jet.com, and we’re adding more digitally native brands to the portfolio. We have an opportunity to improve the margin mix in this business, and we’ll do this by expanding the tail of the assortment through first-party items and marketplace.”
Walmart is also “aggressively” rolling out its online grocery pickup in the U.S.
” We continue to expand our reach from an omnichannel perspective. We now have nearly 2,100 grocery pickup locations and we’ll have about 700 pickup towers by the end of this fiscal year. Grocery pickup has consistently delivered one of the highest Net Promotor Scores we’ve ever had and that continued throughout the aggressive rollout in Q3. As we’ve learned to do pickup well, it has unlocked our ability to provide delivery. We’re moving quickly on this front as well, and by the end of the year we’ll cover about 40 percent of the population with delivery through about 800 stores,” McMillon said.
Walmart’s e-commerce business is “firing on all cylinders”
A new report from eMarketer predicts that Walmart’s share of U.S. e-commerce will eclipse Apple (AAPL) this year, making it the No. 3 e-commerce player behind Amazon (AMZN) and eBay (EBAY).
Walmart’s e-commerce business, which includes Walmart, Sam’s Club, and Jet.com, is forecasted to make up 4% of all online spending in the U.S., totaling $20.91 billion, the report said.
“Walmart’s e-commerce business has been firing on all cylinders lately,” said eMarketer principal analyst Andrew Lipsman. “The retail giant continues to make smart acquisitions to extend its e-commerce portfolio and attract younger and more affluent shoppers. But more than anything, Walmart has caught its stride with a fast-growing online grocery business, which is helped in large part by the massive consumer adoption of click-and-collect.”
Shares of the retailer were up about1% in the pre-market.
On Wednesday, Warren Buffett’s Berkshire Hathaway disclosed that it sold its remaining 1.3 million shares of Walmart.
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Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Send tips to [email protected].