Another booming quarter for Walmart, but sales are slowing

Business News

FILE – In this Nov. 5, 2020 file photo, a woman pushes a shopping cart to enter a Walmart in Rolling Meadows, Ill. Walmart turned out another stellar quarter as the world’s largest retailer powers through a pandemic that has felled other national chains. The Bentonville, Arkansas-based retailer delivered a 56% increase in its fiscal third-quarter profits while revenue rose 5.3%. (AP Photo/Nam Y. Huh, File)

NEW YORK (AP) — Walmart turned out another stellar quarter as the world’s largest retailer powers through a pandemic that has felled other national chains.

But sales at stores opened at least a year slowed in the three months that ended with October compared with earlier this year as the pandemic gained ground. Americans spent more per trip when they did go to Walmart, but they cut down on the number of visits they made.

The U.S. on Tuesday reported the slowest monthly retail salessince the spring when the pandemic seized up the economy. Shares of Walmart were flat in midday trading despite huge profits.

Sales at Walmart stores opened at least a year— a key barometer for a retailer’s health — rose 6.4%. Same-stores sales jumped 9.3% during the second quarter, and 10% in first.

Third-quarter profits surged 56% and net revenue hit $133.75 billion, a 5.3% increase. Both were better that Wall Street had projected. Online sales spiked almost 80% after nearly doubling in the previous quarter.

Despite a sales slowdown before the crucial holiday season, Walmart’s expansion into online grocery is widening the gap between it and its rivals. In September it launched a membership program to deliver what people want more than ever in a pandemic as they reduce their public exposure: convenience.

“This was another strong quarter on the top and bottom line,” said CEO Doug McMillon. “We think these new customer behaviors will largely persist, and we’re well positioned to serve customers.”

McMillon told analysts during a Tuesday conference call that the company is already seeing shoppers stockpile items as the virus cases surge, but it’s more localized. He believes the discounter will be better at responding than during the spring. But he acknowledged that Walmart continues to struggle keeping up with demand for paper goods and cleaning supplies.

It is the ability to offer basics and more that has allowed big box stores to thrive even as thousands of retail stores and national chains suffer.

That trend continued to manifest itself Tuesday at Walmart, and Home Depot as well, which reported a 23% quarterly sales surge. At Kohl’s, a more traditional retailer, sales dropped 13.3% and it lost money. Still, Kohl’s CEO Michelle Gass told analysts on a conference call that results exceeded expectations and it entered the holiday season “well positioned and prepared.” She cited sales growth in its home, toys, activewear and beauty businesses.

Walmart is making further accommodations for a third wave of infections in the U.S., expanding its traditional Black Friday sale over three separate periods in November. Some of the most enticing offers are going online to encourage customers to stay at home.

Over the weekend it began counting the customers that entered its stores as it did this spring, trying to protect them and its staff from crowded aisles.

While Walmart navigates the virus at home, it is retreating further from previous international expansion efforts.

Walmart on Monday said it would sell off 85% of its Japanese supermarket subsidiary Seiyu in a deal valued at 172.5 billion yen ($1.6 billion). It said earlier this month it was backing out of Argentina.

Last month, Walmart Inc. announced the sale of its British supermarket chain Asdafor 6.8 billion pounds ($8.8 billion), though it will keep a minority stake and a seat of the board.

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Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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