In a challenging retail environment where rising prices and supply chains are battered, Walmart said Tuesday that its third-quarter sales were up and earnings beat Wall Street’s expectations.
The giant retailer reported that its sales in the United States rose 9.2 percent, with total revenue up 4.3 percent to $140.5 billion.
Walmart reported earnings of $1.45 per share, beating the $1.40 expected by many analysts. The better-than-expected gains were driven by the company’s strategy to keep prices low as continued growth in its grocery and e-commerce business and consumers face inflation in nearly every spending category, from food to fuel. Shares of Walmart rose nearly 1 percent in premarket trading.
“Our omnichannel focus is pushing digital penetration to record levels,” CEO Doug McMillon said in a statement. “We’ve gained market share in the U.S. grocery store and more customers worldwide are returning to our stores and clubs.”
Like other retailers, Walmart struggles with a tight labor market and a battered supply chain. The company recently increased its starting fee to $12 per hour. Some stores pay as high as $17 to attract and retain workers.
In recent months, the company has begun chartering its own vessels to circumvent shipping congestion and is pushing to hire 150,000 additional workers ahead of the holidays. The company said on Tuesday it is managing supply chain issues by diverting products to less congested ports and extending night hours to help unload cargo.
Walmart said supply chain issues and labor costs add to expenses, but these are offset by sales growth.
Some of its competitors reported problems with empty shelves and spotty inventory, but Walmart noted that its inventory in the United States was 11.5 percent higher toward the holiday season.
“The holiday season is here and we’re ready,” Mr McMillon said in a phone call with analysts.
The company is also feeling optimistic as we enter the last quarter, which is typically the most critical for retailers, raising its full earnings year guideline from $6.20 to $6.35 per share to $6.40 per share.