Walmart Boosts Sales and Earnings Forecast, Lures Shoppers Across Income Brackets

Walmart (NYSE: WMT) just upgraded its full-year sales and earnings forecast after releasing third-quarter results that topped Wall Street's estimates. The retail giant's revenue climbed thanks to impressive double-digit e-commerce growth and new customers coming through its doors from various income levels.

For the fiscal year, Walmart now anticipates net sales growth between 4.8% and 5.1%, a notable increase from the earlier projection of 3.75% to 4.75%. Adjusted earnings per share were nudged up slightly to a range of $2.58 to $2.63. This marks the second consecutive quarter the company has raised its forecast.

This earnings report lands shortly after Walmart announced big changes at the top: John Furner, head of its U.S. operations, is set to replace Doug McMillon as CEO starting February 1. While McMillon steps down, the baton passes to a leader with direct experience managing the core American business.

Chief Financial Officer John David Rainey spoke about consistent consumer behavior during the quarter, with shoppers carefully hunting deals amid economic uncertainty. Walmart appears to be capitalizing on this by attracting what Rainey called "value-seeking" customers across all income brackets. The retailer's reputation for affordable prices and convenience has become increasingly important as inflation impacts household budgets.

During the government shutdown, the pause in Supplemental Nutrition Assistance Program (SNAP) benefits caused a temporary slowdown, but purchases have started bouncing back since benefits resumed. This highlights the real-time effects of social policies on retail sales patterns.

Walmart also revealed it will move its stock listing to the Nasdaq on December 9 while keeping its familiar ticker WMT. Despite the upbeat results, shares dipped about 2% in premarket trading but remain up 11% year-to-date, slightly underperforming the S&P 500's gains.

Digging into the numbers, Walmart posted an adjusted EPS of 62 cents, beating the 60-cent consensus. Revenue hit $179.5 billion versus the anticipated $177.43 billion. Comparable sales at Walmart U.S. grew 4.5% excluding fuel, exceeding predictions. Sam's Club saw comparable sales climb 3.8%.

E-commerce was a standout segment, with global online sales up 27%. U.S. e-commerce expanded 28%, powered by faster store-fulfilled deliveries and a growing third-party marketplace. Around one-third of online orders now arrive within three hours, a capability reaching 95% of U.S. households. This quick delivery service, bundled partially in the Walmart+ subscription, has flourished, boosting related revenue by 70% year over year.

Walmart's advertising arm is another growth engine, expanding 53% globally in the quarter, thanks to investments like the acquisition of smart TV maker Vizio. Its U.S. advertising brand, Walmart Connect, grew by 33%. These moves highlight Walmart's efforts to diversify and capitalize on digital trends.

The retailer isn't shying away from acquisitions, reportedly in talks to buy R&A Data, a company tackling scams and counterfeit goods. Operating under the shadow of tariffs, Walmart continues to absorb some tariff-related costs to keep prices competitive. Roughly a third of its U.S. products are imported, with China and Mexico among key sources.

Walmart's robust performance stands in contrast to recent profit outlook cuts by peers like Target, Home Depot, and Lowe's, which cite cautious consumers shying away from bigger spend. While those retailers grapple with uncertainty, Walmart has positioned itself as a destination for value and convenience, banking on a strong holiday season ahead.