On November 20th, Walmart raised its annual performance expectations for the second time this year. The company’s strong growth in the third quarter was largely driven by the surge in online sales.
In early trading, Walmart’s stock rose by 5.9%, following the adjustment of its annual net sales growth expectations from 3.75%-4.75% to 4.8%-5.1%. The company also revised its adjusted earnings per share forecast to $2.58-$2.63, up from the previous $2.52-$2.62, and announced the transfer of its stock listing from the New York Stock Exchange to the Nasdaq.
Walmart’s CFO John David Rainey stated during the earnings call that the holiday season had a strong start. Despite some signs of slowing down, the company remains optimistic about consumer engagement in holiday activities and expects trends in the fourth quarter to be similar to earlier quarters.
According to data from the London Stock Exchange Group (LSEG), U.S. same-store sales, including both online and offline, grew by 4.5% from August to October, surpassing the previous expectation of 3.8%.
Walmart’s online sales increased by 28%, mainly driven by growth in grocery sales. Sales across all income levels showed growth, with higher-income households being a significant driver once again, benefiting from the convenience of fast delivery services.
Walmart’s same-day delivery service, “Express Delivery,” saw a 70% increase this quarter. The report indicates that e-commerce in the U.S. has sustained over 20% growth for the seventh consecutive quarter.
Walmart’s stock has risen approximately 11% this year, significantly outperforming the 0.25% decline in the S&P 500 Consumer Staples Index.
In comparison to Walmart, home improvement companies Lowe’s and Home Depot lowered their annual targets this week. Target also experienced a decline in sales.
Zacks Investment Research strategist Bryan Hayes noted, “For the retail industry as a whole, Walmart’s performance highlights a dichotomy in consumer behavior: value-oriented retail giants thrive by attracting different income groups, while competitors like Target, focused on non-essential goods, face challenges.”
During the analyst call following the earnings release, Walmart executives mentioned that their investments in automation over the past decade have reshaped their logistics network in the U.S. Currently, over 60% of goods are transported through automated distribution centers, with more than half of online orders fulfilled through automated facilities.
Walmart is utilizing advanced tools like Agentic AI to enhance product catalog accuracy and identify gaps in product assortments, helping customers find desired items more swiftly.
On November 20th, Walmart announced the transfer of its stock listing from the New York Stock Exchange to the Nasdaq starting December 9th. Rainey stated during the call, “Moving to Nasdaq aligns with our people-led, technology-driven long-term strategy.”
According to reports from the Financial Times and Investopedia, Walmart has significantly invested in e-commerce, artificial intelligence, and automation technologies in recent years. Management states that the move to Nasdaq, focusing on tech companies, demonstrates Walmart’s commitment to transforming from a traditional retailer to a technology-oriented enterprise.
Additionally, Reuters reported that Nasdaq has a larger tech and growth investor base, and Walmart aims to increase exposure among such investors, enhance liquidity, and strengthen the potential for inclusion in tech-focused indices.
In conclusion, this move signals to the market that Walmart is reshaping itself, evolving from a retail giant to an actively innovating technology company.
(Reference: Reuters)