ii view: US economic bellwether Walmart reassures

Third-quarter results to 30 September  

• Currency adjusted revenue up 6% to $179.5 billion (£136.4 billion)
• Adjusted earnings per share (EPS) up 7% to $0.62 per share

Guidance:

• Now expects full-year net sales growth of between 4.8% and 5.1%, up from a previous 3.75-4.75%,
• Now expects full-year adjusted earnings of between $2.58 and $2.63 per share, up from a previous $2.52-2.62

Chief executive Doug McMillon said:

“The top-line momentum we have in our business comes from how we’re innovating and executing. Connecting with our customers and members through digital experiences is helping to drive our business, and the way we’re deploying AI will make these experiences even better. 

“We’re people-led and tech-powered, and I love how our associates continue to drive change and results for our company.”

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ii round-up:

Walmart Inc (NYSE:WMT) today detailed sales and profit that beat Wall Street forecasts, with the retail mammoth also raising full-year forecasts.

Third-quarter global ecommerce sales up 27% helped drive group-wide revenues up 6% to $179.5 billion. Adjusted earnings rose 7% from a year ago to $0.62 per share. Analysts had expected $177.5 billion and 60 US cents respectively. 

Shares in the Dow Jones company rose 5% in early trading US trading having come into these latest results up by just over a tenth so far in 2025. The Dow Jones index is up around 9% year-to-date, while Amazon.com Inc (NASDAQ:AMZN) has risen by less than 4%.

Walmart operates more than 10,700 stores and numerous eCommerce websites in 19 countries. 

Reporting under the soon to retire CEO Doug McMillon, Walmart now expects annual net sales growth of between 4.8% and 5.1%, fuelling adjusted earnings of between $2.58 and $2.63 per share. That’s up from sales growth as high as 4.75% and earnings of up to $2.62 per share. 

John Furner, Walmart’s current US business head, has been appointed to the position as of early February next year. Doug McMillon has been in charge for ten years. 

Sales at the core US business rose 6% to $120.7 billion. ‘Sam’s Club’ stores grew 3.1% to $23.6 billion. Membership and other income improved 9% to $1.7 billion. Overseas sales improved 10.8% to $33.5 billion. 

Walmart highlighted some temporary slowness during the period when the government’s Supplemental Nutrition Assistance Programme was paused during the shutdown.

Fourth-quarter and full-year results are scheduled for 19 February. 

ii view:

Started in 1962, Walmart today employs over two million people. Selling products ranging from food and drink to clothes, toys and furniture, it serves approximately 270 million customers each week. The core US business generated most sales in 2024 at 82% with overseas operations making up the balance. 

For investors, US trade tariffs continue to inject uncertainty, particularly with manufacturing giant China. Heightened shelf prices may increase inflation, leaving interest rates higher for longer. A forecast one-year price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap, while currency moves can impact performance. 

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To the upside, sales at the group’s ecommerce business continue to progress. Other US retailers will be suffering similar tariff related challenges, with Walmart’s size giving it a competitive advantage. A diversity of products and geographical markets exists, while the dividend has grown consecutively for more than 50 years, leaving the shares offering a forecast yield of close to 1%. 

For now, and while risks remain, a consensus analyst fair value estimate above $112 per share is likely to leave investors firmly interested in this US retail giant. 

Positives: 

• Ongoing share buybacks
• Focus on customer value

Negatives:

• Uncertain economic outlook
• Subject to currency moves

The average rating of stock market analysts:

Buy