Walmart CEO Doug McMillon said the company’s turnaround, which was aimed at pushing back against Amazon’s dominance, is finally starting to resonate with Wall Street.
In an interview with TheStreet.com, McMillon said Walmart has been accelerating its pace of change, which has driven the retailer’s stock up more than 40 percent so far in 2017.
“People might be recognizing that the change is actually happening on top of some assets that are really valuable,” he said. The comments come as the stock jumped 10 percent on Wall Street late last week after Walmart posted strong earnings for its third quarter.
Walmart’s same-store sales figure — the most-watched number in any retail earnings report — was up 2.7 percent, excluding fuel, compared with an anticipated increase of 1.8 percent. The company’s eCommerce sales were up 50 percent during Q3, representing a big jump year over year, even though it fell short of the 60+ percent Walmart saw in Q2 and Q1 growth. Earnings came in at $1.00 per share, slightly edging out forecasts of $0.97 cents per share. Revenue was $124 billion with net income of $1.75 billion, or $0.58 a share. The average ticket at Walmart’s U.S. stores was up 1.2 percent, helped by the rapid growth of its food business.
Walmart said its grocery categories delivered the strongest quarterly comparable sales performance in nearly six years, with fresh meat, bakery and produce topping the list. Same-store sales at Sam’s Club, excluding fuel, climbed 2.8 percent in the fiscal third quarter, compared with an increase of 1.4 percent one year ago. All of that good news prompted Walmart to revise its guidance for the year in a direction that investors will appreciate. Adjusted earnings per share are now pegged at $4.38 to $4.46, up from $4.30 to $4.40 a share.
“We have momentum, and it’s encouraging to see customers responding to our store and eCommerce initiatives,” Walmart CEO McMillon said in the company’s third quarter earnings statement. “Existing customers have become advocates for popular initiatives like online grocery and free two-day shipping, and, as a result, new customers, suppliers and partnerships are coming to Walmart.”