Goldman adds Walmart stock to conviction buy list, drops Target


A shopper carries a bag outside a Walmart store in San Leandro, California, on Thursday, May 13, 2021.

David Paul Morris | Bloomberg | Getty Images

Walmart‘s fiscal third-quarter earnings on Tuesday topped analysts’ expectations as price-sensitive grocery shoppers flocked to its stores amid rising costs for household staples.

The retailer’s size is helping it manage through snarled supply chains, as it negotiates with manufacturers, bulks up its inventory and charters its own ships to move goods across the globe. Walmart raised its forecast for the year, saying adjusted earnings per share will be around $6.40 versus its prior expectations of between $6.20 and $6.35. 

Here’s what the company reported for the fiscal third quarter ended Oct. 31, according to Refinitiv consensus estimates:

  • Earnings per share: $1.45 adjusted vs. $1.40 expected
  • Revenue: $140.53 billion vs. $135.60 billion expected

Walmart’s net income fell to $3.11 billion, or $1.11 per share, from $5.14 billion, or $1.80 per share, a year earlier. Excluding items, the company earned $1.45 per share. Analysts were expecting Walmart would earn $1.40 per share, according to Refinitiv.

Total revenue grew by about 4% to $140.53 billion from $134.7 billion a year earlier, exceeding Wall Street’s expectations of $135.60 billion.

Walmart’s same-store sales in the U.S. grew by 9.2%, excluding fuel, higher than the 6.9% expected by a StreetAccount survey. 

Walmart’s e-commerce sales in the U.S. grew 8% versus the year-ago quarter — or 87% on a two-year basis.

Walmart, known for its emphasis on “Everyday Low Price,” is one of the retailers that stands to better weather a period of inflation. As consumers feel sticker shock, they may buy more of their groceries, clothes and other goods at the retailer’s stores and website instead of turning to competitors.

Walmart CEO Doug McMillon said in a press release that the company is gaining market share in grocery as U.S. consumers return to stores.

At Walmart’s membership-based warehouse club, Sam’s Club, same-store sales grew 13.9%, excluding fuel, compared with the 8.7% growth expected by StreetAccount. 

As of Monday’s close, Walmart shares are up about 2% this year. Shares closed down less than 1% Monday at $146.91, bringing Walmart’s market value to $409.66 billion. Its shares have lagged behind the S&P 500, which is up about 30% this year. 

This is breaking news. Please check back for updates.



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