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Wal-Mart Lifts Profit Outlook on Strong Third-Quarter Results

3 min read

NEW YORK — Wal-Mart Stores Inc. of Bentonville raised its annual profit outlook Thursday after the world’s largest retailer reported third-quarter results that topped Wall Street projections.

The report shows that Walmart’s aggressive discounting, its moves to spiff up its stores and increase online services are working to attract shoppers. It also underscores the efforts the discounter is making to narrow the gap between itself and Amazon, but it still faces big challenges this holiday shopping season. The online leader has been building its network of services on its own, using its $99-a-year Prime membership with same-day and even one-hour shipping options to develop loyalty.

Since buying Jet.com for more than $3 billion last year, Walmart has been on an acquisition spree, has added new online services and expanded its online offerings. Walmart has bought such online retailers as Bonobos and ModCloth and is looking for other niche players. It has also tripled the number of online items to more than 60 million, from 20 million last year at this time.

The discount chain announced a web partnership Monday with high-end department store Lord & Taylor. Walmart aims to build a premium fashion website, starting with the department store chain. Lord & Taylor hopes it’ll attract new customers already buying higher-end products on walmart.com.

The world’s largest retailer posted revenue of $123.18 billion in the third quarter, surpassing Wall Street forecasts. Eight analysts surveyed by Zacks expected $121.05 billion. Sales at stores opened at least a year rose 2.7 percent, beating estimates of 1.8 percent. And e-commerce sales grew 50 percent.

“Walmart’s online performance continues to validate its substantial investments in this critical channel, including its purchase of Jet.com,” Moody’s Lead Retail Analyst Charlie O’Shea said in a note.

The company has been aggressively cutting prices and has overhauled its shipping strategy and is planning to double the number of store-curb pickup for groceries ordered online to 2,000 by next year. And it’s aligned with Google on voice shopping, as it tries to chip away the dominance of Amazon’s Alexa-powered Echo devices.

For the critical holiday shopping season, Walmart needs to keep that momentum going. It started kicking off holiday parties in the stores. And it hopes to tempt shoppers with online deals before Black Friday. It started some online deals a week ago and plans to offer most of its Black Friday deals online starting at 12:01 a.m. ET on Thanksgiving. Stores will be open all day on Thanksgiving with the deals available there at 6 p.m. local time.

Walmart said it had fiscal third-quarter net income of $1.75 billion. On a per-share basis, the Bentonville, Arkansas-based company said it had net income of 58 cents. Earnings adjusted to extinguish debt and for non-recurring costs came to $1 per share. The results exceeded Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of 97 cents per share.

The company expects full-year earnings in the range of $4.38 to $4.46 per share.

Wal-Mart Stores Inc. shares have climbed 30 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 15 percent. Its shares rose more than 3 percent, or $3.02, to $92.85 in pre-market trading Thursday.

(All contents © copyright 2017 Associated Press. All rights reserved.)
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