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NEW YORK, United States — Wal-Mart Stores Inc. topped third-quarter earnings estimates and boosted its annual forecast, a sign the world's largest retailer is benefiting from its push to expand e-commerce and improve its stores.
Profit was 98 cents a share in the third quarter, which ended Oct. 31, the company said in a statement Thursday. Analysts estimated about 96 cents, according to data compiled by Bloomberg.
Customer traffic and a surge in online sales helped fuel the results, which bode well for the all-important holiday season. Chief Executive Officer Doug McMillon has been pushing to lower Wal-Mart’s prices, clean up stores and take better care of customers. The company also acquired web startup Jet.com for about $3 billion in September, giving a jolt to an e-commerce division that had begun to flag.
“We are going into the holidays in a really good position from a momentum standpoint,” Chief Financial Officer Brett Biggs said in an interview.
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Wal-Mart shares climbed 16 percent this year through Wednesday’s close, lifted by its improving performance. That outpaced the 6.5 percent gain of the Standard & Poor’s 500 Index.
Chasing Amazon
Since taking the helm in 2014, McMillon has boosted pay for U.S. workers, tried to improve Wal-Mart’s grocery offering and spent billions on its online operations -- aiming to gain ground on Amazon.com Inc. Sales at U.S. stores open more than 12 months rose 1.2 percent in the quarter, just shy of the 1.3 percent predicted by analysts.
Total revenue increased 0.7 percent to $118.2 billion. Overseas, the strong dollar weighed on sales, turning a 2.4 percent increase at its international unit into a 4.8 percent decline.
Wal-Mart also raised the lower end of its forecast of the year. The Bentonville, Arkansas-based company now expects annual earnings of $4.20 to $4.35 a share, excluding some items. It had previously set the bottom of the range at $4.15.
Wal-Mart’s online business increased 21 percent last quarter, an acceleration from the 12 percent gain in the second quarter. E-commerce sales growth had been slowing, and Wal-Mart has been trying to shore up the business. The Jet.com deal gave Wal-Mart access to the startup’s technology and management, as well as contributing more than a month worth of its sales to the retailer’s third quarter.
“E-commerce was a highlight,” Biggs said. “We expect to continue seeing that momentum.”
By Shannon Pettypiece; editors: Nick Turner & Kevin Orland.
