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Walmart Stock Edges Lower After Q3 Earnings Beat Driven By Comp Sales Gains

Walmart followed Home Depot with a stronger-than-expected third quarter earnings report driven in part by solid same-store sales.

Walmart  (WMT) - Get Walmart Inc. Report posted stronger-than-expected third quarter earnings Tuesday, while boosting its full-year profit forecast, following Home Depot's lead with solid same-store sales.

The stock edged lower, however, as investors reacted to disappointing profit margins that were pressured by rising supply chain disruption and labor costs. 

The world's biggest retailer said adjusted earnings for the three months ended in October came in at $1.45 per share, rising 8.2% from the same period last year and topping the Street consensus forecast of $1.40 per share.

Group revenues, the company said, were tabbed at $140.5 billion, a 4.3% increase from last year that topped analysts' estimates of $135.6 billion. U.S. same-store sales rose 9.2% from last year, the company said, well ahead of the Refinitiv forecast of around 7.1%.  

Looking into the 2022 financial year, Walmart said it sees earnings in the range of around $6.40 per share, up 35 cents from the higher end of its prior estimate, with comparable sales rising by 5%. 

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“Our momentum continues with strong sales and profit growth globally. Our omnichannel focus is pushing digital penetration to record levels," said CEO Doug McMillon. "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."

"Looking ahead, we have the people, the products, and the prices to deliver a great holiday season for our customer sand members,” he added.

Walmart shares were marked 2.7% lower in late-morning trading following the earnings release to change hands at $143.00 each.

Earlier Tuesday, Home Depot  (HD) - Get Home Depot, Inc. (HD) Report kicked-off a key set of retail sector data with stronger-than-expected third quarter earnings and a big beat on same-store sales, while the Commerce Department will release its October reading for retail sales at 8:30 am Eastern time.

U.S. consumer price inflation accelerated to the fastest pace in three decades last month, data from the Bureau of Labor Statistics indicated last week, as record-high energy prices and supply chain disruptions lifted the heading reading to 6.2%.

So-called core inflation, which strips-out volatile components such as food and energy prices, rose 0.6% on the month, and 4.6% on the year, the report noted, with both readings topping the Street consensus forecast..