Walmart CEO: Pandemic Shopping Is Permanent
E-commerce trends accelerated by the global health crisis continued to boost growth at Walmart in the third quarter.
The retailer reported another stunning e-comm metric for the year, bolstering the company's view that pandemic-related shopping behaviors are here to stay. Walmart's U.S. online sales grew 79% during the period ended Oct. 31 with strong results across all channels, contributing approximately 570 basis points to comp sales.
Walmart U.S. same-store sales increased 6.4% with strength across categories such as general merchandise, health & wellness and food. Increased demand for products across multiple categories led to strong top-line and gross margin results. Transaction size and average ticket were up 1.3% and 1.9% respectively.
Walmart did not provide an outlook, but CEO Doug McMillon said he thinks the shift in shopping behaviors due to the pandemic, including the three-to-five year acceleration in e-commerce, is permanent.
“This was another strong quarter on the top and bottom line. Our associates continue to impress during this challenging year. They are working together to serve customers and communities in new, relevant ways and we’re very proud of them. We think these new customer behaviors will largely persist and we’re well positioned to serve customers with the value and experience they’re looking for," McMillon said.
When it came to grocery, Walmart said its Q3 food sales reflected broad-based strength across most categories and improved throughout the quarter; consumables sales growth was led by strength in household chemicals and paper products. Pickup and delivery services continued to experience record high sales volumes.
Total revenue in Q3 was $134.7 billion, an increase of $6.7 billion, or 5.2%. Walmart reported net income of $5.14 billion, or $1.80 per share, from $3.29 billion, or $1.15 a share, a year earlier. Excluding items, Walmart earned $1.34 per share.
Walmart subsidiary Sam’s Club also had an impressive quarter. Sam’s Club comp sales increased 11.1%. E-commerce sales grew 41%. Reduced tobacco sales negatively affected comp sales by approximately 420 basis points. New member sign-ups and renewal rates were strong, particularly Plus membership. Membership income increased 10.4%.
Specifically in Sam's Club grocery, comps in fresh/freezer/cooler were up in the high teens. Fresh meat, frozen and produce performed well. Comps in grocery and beverage were up in the mid teens. Dry grocery, juice, snacks and soda performed well. Comps in consumables were up 20%. Broad-based strength occurred in laundry, paper goods and beauty aids. Comps in health and wellness were up in the high teens. OTC performed well.
Walmart International net sales were $29.6 billion, an increase of 1.3%. Changes in currency rates negatively affected net sales by approximately $1.1 billion. Excluding currency, net sales would have been $30.6 billion, an increase of 5.0% led by Flipkart, Canada and Walmex. Strong growth in net sales at Flipkart was helped by a record number of monthly active customers.
Bentonville, Ark.-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer's list of the top food retailers in North America, while Walmart-owned Sam's Club ranks No. 9 on the list.
