Walmart shares jump after earnings, sales beat Wall Street expectations

Walmart Stocks jumped as much as 8.5% on Tuesday morning after the world’s largest retailer reported strong third-quarter earnings and revenue amid a tumultuous economic environment. The company also raised its outlook for the full year.

The walmart newswhich is considered a spending barometer given its market capitalization of over $400 billion, reinforced the idea that a growing number of consumers are turning to the discount chain to reduce their spending amid a high inflation.

Despite the strong quarter, the Arkansas-based company took a financial hit. Walmart has agreed to pay $3.1 billion to settle nationwide lawsuits over the impact of prescriptions its pharmacies filled for powerful prescription opioid painkillers. The agreement still needs to be approved by 43 states to enter into force.

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WMT WALMART INC. 147.57 +9.19 +6.64%

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The company lost $1.79 billion, or 66 cents per share, in the three months to Oct. 31, including the opioid settlement. A year ago, Walmart posted earnings of $3.1 billion, or $1.11 per share. Adjusted earnings per share were for earnings of $1.50, which easily beat analyst estimates of $1.32 per share.

Sales rose 8.7% to $152.81 billion, beating Wall Street estimates of $147.7 billion, according to FactSet. Sales at U.S. Walmart stores that have been open for at least a year increased 8.2% and online sales increased 16%.

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CEO Doug McMillon said the company “had a good quarter with strong revenue growth globally led by Walmart and Sam’s Club US.” As a result, Walmart raised its full-year outlook to reflect third-quarter performance.

The company expects consolidated net revenue growth of 5.5% for fiscal 2023, compared to 4.5% previously. Excluding disposals, growth should be 6.5%, against 5.5% previously.

Same-store sales in the United States, excluding fuel, are now estimated at 5.5%, compared to 3% previously estimated.

Jaime Vado repairs a display on the island of a Walmart store as they prepare for Black Friday shoppers on November 24, 2015 in Miami, Florida. (Photo by Joe Raedle/Getty Images/Getty Images)

McMillon also noted that the company “significantly improved” its inventory position throughout the quarter and offered an optimistic outlook for the final months of the year as the company offers holiday deals to entice buyers.

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Inflationwhich remains high, still presents challenges for Walmart and other retailers as low-income shoppers cut spending.

Walmart store

This file photo shows the entrance to a Walmart in Pittsburgh, Penna. (AP Photo/Gene J. Puskar, File/AP Newsroom)

However, inflation is slowing down. Consumer inflation hit 7.7% in October from a year earlier and 0.4% from September, the Labor Department announced earlier this month. The year-over-year increase, a slowdown from 8.2% in September, was the smallest increase since January.

The Associated Press contributed to this report.

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