Walmart Beats Q3 Estimates, Has Increased Inventory Ahead of Holiday Season

Kimberly Redmond  |

Video source: YouTube, CNBC Television

Walmart Inc (NYSE: WMT) has yet to see a large wave of early holiday shoppers this year but expects that will change after the company kicks off its Black Friday sales, which will be spread across the month of November this year.

Many retailers, including Target

(NYSE: TGT), Best Buy (NYSE: BBY) and Amazon (Nasdaq: AMZN), began holiday promotions in October, warning consumers of longer delivery times and reduced product availability while urging shoppers

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to buy in-demand items as soon as they see them.

In contrast, once Walmart launches its sales, the chain’s chief executive officer Doug McMillon said it will be ready for shoppers on the hunt for gifts.

According to McMillon, the chain’s inventory is up 11.5% ahead of the season. It has also ordered merchandise early, chartered dedicated ships for Walmart goods and directed them to less congested ports.

“There’s a level of excitement in the air,” he said. “You can feel it. I’ve been walking away from these stores with a recurring thought, ‘We’re ready, we have the people, the products, and the prices to deliver a great holiday season.’” 

This year’s holiday shopping season has the potential to break previous records. The National Retail Federation (NRF), the nation’s largest retail trade group, recently predicted a sales increase by as much as 10.5% over last year to $859 billion.

Michael Baker, a retail analyst for D.A. Davidson, told CNBC he expects that big-box retailers will fare better than smaller chains this season because “consumers will feel more confident they can find what they want — or at least a good substitution.”

“Customers are going to understand that the bigger retailers do have a better chance of having the products they want in stock and navigating the supply chain issues,” he said. “People don’t have to be in the finance world now to understand what’s going on with the supply chain. It’s on the news every night. So people get it. People know that a lot of places are going to have out of stocks.”

Walmart’s decision to start its holiday sales after its competitors did not hurt its third quarter earnings, which were released Tuesday. 

Amid rising costs, more price-sensitive grocery shoppers opted to buy household staples at Walmart, which helped the retailer beat Wall Street’s expectations for the period.

Total revenue in the quarter grew by about 4% to $140.53 billion from $134.7 billion a year ago, above the projected $135.60 billion.

Net income fell to $3.11 billion, or $1.11 per share, from $5.14 billion, or $1.80 per share. Excluding items, the company earned $1.45 per share, beating the $1.40 analyst forecast.

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Source: Equities News

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