News

Walmart Q3 earnings top forecasts but sales lag; online accelerates

BY Marianne Wilson

Walmart on Thursday posted third-quarter earnings that managed to beat analysts' expectations even as net sales fell short.

The retailer also lifted the lower end of its full-year guidance and expressed confidence going into the holiday season.

Walmart’s net income fell to $3.03 billion, or 98 cents per share, in the quarter ended Oct. 31, which was two cents more than the Wall Street consensus according to Bloomberg.

Total revenue inched up 0.7% to $118.2 billion, less than expected, hurt by declining food prices and unseasonably warm weather in many parts of the country. Walmart, along with many other retailers, has been challenged by food deflation for the past year.

Same-store sales rose 1.2%, shy of the forecast for 1.3%.

“While the growth figures on Walmart’s top line may not be stellar, they nonetheless indicate that the world’s largest retailer is still capable of eking out growth. They also stand in marked contrast to the more negative figures from rival mass merchant and department store retailers. In short, in a time of change and flux in retail, Walmart is still more than holding its own,” commented Neil Saunders, CEO of retail research and consulting firm Conlumino. “Looking ahead to the holiday period, we believe that Walmart has a sound strategy which involves, but goes way beyond, low prices. Initiatives around exclusive merchandise, entertainment in store, and improved customer service align with consumer demand and should serve the company well in its most important quarter.”

Store traffic rose slightly, for the eight consecutive quarter of growth.

The brightest spot in Walmart’s quarterly results occurred online, where sales increased 20.6% globally, helped by the chain’s acquisition of pure player Jet.com. The digital business added 50 basis points to Walmart’s third-quarter comparable sales, its biggest contribution to date.

We had a solid third quarter,” stated CEO Doug McMillon “Our e-commerce growth accelerated, operations in the U.S. continued to strengthen and international delivered another solid performance. We are pleased that we can see real progress stemming from our strategic choices.”

In September, Walmart completed its $3.3 billion acquisition of Jet.com. The retailer’s results included the operating impact of Jet.com for half of the quarter, as well as the transaction costs related to its billion acquisition.

Walmart raised the lower end of its forecast for the year, now anticipating earnings of $4.20 to $4.35 a share. It earlier set the lower end at $4.15.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you concerned that tariffs will impact your business in 2019?
News

Forrester: Online holiday sales to increase 13%

BY Marianne Wilson

U.S. online holiday spending will reach $112 billion in 2016, growing 13% over 2015.

That is according to Forrester’s Holiday Retail Sales Forecast, which said that while online sales are 12% of annual retail sales, they jump to 16% of total holiday sales during the November and December months.

Forrester said that cooler winter weather will help bolster holiday sales. Record-high temperatures in parts of the Northeast last Christmas cut into seasonal product sales, such as winter apparel, leading to a lackluster overall holiday performance. The expectation of more average December temperatures for 2016 will lift holiday spending, online and off, especially on clothing and footwear products, over last year.

Economic indicators also point to an optimistic holiday shopping season for retailers, according to the Forrester report. Consumer economic confidence is stable, unemployment is low, gas prices are still cheap, and online retail sales from the first quarter through the third quarter of 2016 grew faster than they did last year, according to the report.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you concerned that tariffs will impact your business in 2019?
News

Kronos: Tips for reducing holiday turnover

BY Marianne Wilson

The ghost of holidays past hangs over many retail workers, according to a new study of part- and full-time retail employees by Kronos.

Forty-percent of employees in the survey said that their employer did not have enough staff in previous years to account for the amount of shoppers they receive at their store. And 53% are worried about getting burned out during the holiday season.

The “Retail Employees’ Holiday Wish List” survey, conducted by Harris Poll, found that retail employees don’t mind working extra-long hours, but they would like to choose their own schedules and receive a higher pay rate for overtime hours worked.

“This survey reveals that by giving employees more input into their schedules, making schedules available via mobile devices; and providing them with time off to spend with their families during the holidays, retailers can improve the work lives of their employees and retain them for future seasons,” said Charlie DeWitt, VP, business development, Kronos. “Progressive retailers such as our long standing customer Costco are doing just this.”

Among the strategies retail employees say would make working during the holiday season easier are:

◦ Letting employees choose their own schedules (57%);

◦ Enabling employees to take time off around the holidays (51%);

◦ Providing a more stable schedule (44%); and

◦ Giving employees access to their schedule via mobile device (22%).

When it comes to turnover, the workers say employers can prevent them from leaving during the holiday season by:

◦ Paying a higher rate for overtime hours worked during the holiday season (65%);

◦ Providing an extra “paid holiday” during the holiday season (60%);

◦ Enabling more work-life balance with employee schedules (57%);

◦ Hiring more staff (55%); and

◦ Allowing employees to switch their days with others (47%).

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you concerned that tariffs will impact your business in 2019?