New York (AFP) – Walmart reported a jump in third-quarter profits Tuesday behind solid US sales and gains in its e-commerce business as the retail behemoth lifted its full-year financial forecast. The big-box chain reported quarterly profits of $4.6 billion, about 10 times the level of the year-ago earnings, which were marred by losses on equity investments. Revenues rose 5.5 percent to $169.6 billion.
Walmart’s US business, which accounts for about two-thirds of revenues, enjoyed a solid 5.3 percent gain in comparable store sales. The company also reported a 27 percent jump in its global e-commerce, which translated into smaller losses for a category that is still not profitable. While Walmart pointed to “broad-based strength across merchandise categories,” it gained market share “primarily” from upper-income households.
Walmart has generally turned in good profits in recent years as US consumers have been hit by rising inflation, with more higher-income shoppers turning to the chain amid affordability concerns. Still, the latest batch of results points to improvements in general merchandise, a discretionary category that suffered during the worst of the inflationary period. Walmart pointed to home and toys as two categories that enjoyed recovery.
“Walmart is still holding onto the vast majority of the gains it has made,” said Neil Saunders of GlobalData. “Yes, there are concerns that as prices and incomes rebalance, some of these new shoppers may drift away,” he added. “Even if this happens, we believe it will only do so at the margins as many households currently say they intend to stick with Walmart for everyday essentials such as cleaning products and basic personal care.”
The company increased its full-year profit forecast to a range of $2.42 to $2.47 per share, lifting its midpoint of the prior range by five and a half cents. Shares jumped 3.9 percent in pre-market trading.
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