Grocery Sales Buoyed Walmart’s Latest Earnings

Walmart’s third-quarter earnings results topped analysts’ expectations as the mega-retailer brought in shoppers and overcame supply chain challenges.
Walmart shoppers

Walmart reported its third-quarter sales rose 9.2% and raised its guidance for the third consecutive quarter. Despite ongoing supply chain challenges in the retail industry––including port congestion, shipping delays and staffing shortages––Walmart reported its inventory was up 11.5% ahead of the holidays. The retailer has been able to leverage its size to navigate the tricky supply chain waters.

“Our momentum continues with strong sales and profit growth globally,” Doug McMillion, president and CEO of Walmart, said in a statement. “Our omnichannel focus is pushing digital penetration to record levels. We gained market shared in grocery in the U.S. and more customers and members are returning to our stores around the world.”

Total revenue during the quarter reached $140.5 billion, up 4.3%. However, revenue was negatively affected by $94 billion in divestitures. On a two-year stack, comp sales were up 15.6% during the quarter.

The quarter was led by 8% growth in e-commerce sales, which were up 87% on a two-year stack. In addition, Walmart continued to gain market share in grocery, with grocery sales up nearly 10% and food sales grew $3.6 billion. Food sales during the quarter marked the strongest quarterly growth in six quarters, according to McMillion.

“The gains we've seen in market share for grocery and strong back-to-school results indicate our inventory position has improved,” he said during the company’s third-quarter earnings call with analysts. “Prices and assortment are compelling and customers continue to move away from early pandemic behaviors. We see tailwinds in our results.”

Sam’s Club, which is owned by Walmart, reported comp sales increased 13.9% and 25% on a two-year stack, while e-commerce sales grew 32%. The warehouse retailer saw membership income rise 11.3% during the quarter from 2020.