Walmart Q3 Earnings Top Estimates, Lifts FY22 Outlook

Walmart Inc WMT reported third-quarter FY22 sales growth of 4.3% year-on-year, to $140.53 billion, beating the analyst consensus of $135.60 billion. Excluding currency, total revenue would have increased 3.3% to $139.2 billion.

Net sales from the Walmart U.S. increased 9.3% Y/Y, Walmart International declined 20.1%, and Sam's club rose 19.7%. Walmart U.S. Q3 comp sales without fuel grew 9.2%.

The operating margin was 4.1%, and operating income for the quarter rose 0.2% to $5.8 billion. Consolidated gross profit rate fell 42 basis points due to increased supply chain costs, a higher mix of lower margin fuel business in the U.S., and a shifting international format mix.

Adjusted EPS of $1.45 beat the analyst consensus of $1.40. Walmart U.S. inventory up 11.5% ahead of holidays.

Walmart held $16.1 billion in cash and equivalents as of October 31, 2021. Cash provided by operating activities totaled $16.3 billion year-to-date with a free cash flow of $7.7 billion.

"We gained market share in grocery in the U.S., and more customers and members are returning to our stores and clubs around the world," said Doug McMillon, President and CEO, Walmart.

Outlook: Walmart raised FY22 adjusted EPS outlook to $6.40 (prior guidance $6.20 - $6.35) versus the consensus of $6.33. It sees FY22 Walmart U.S. comp sales above 6%, excluding fuel.

For Q4, Walmart expects U.S. comp sales of around 5%.

Price Action: WMT shares are trading higher by 0.74% at $147.96 in premarket on the last check Tuesday.

Photo by Walmart Corporate via Wikimedia