Need to Know
- Walmart’s revenue for the third quarter increased 5.2% to $134.71 billion, while net income hit $5.14 billion, up from $3.23 billion last year.
- Online sales increased by 79% as COVID-19 continued to lead shoppers toward home delivery and in-store pickup options.
- While transactions fell by 14.2% year-over-year, individual tickets increased in value by 24%, as shoppers consolidated visits due to the pandemic.
Walmart has exceeded industry analysts with its Q3 earnings, posting a revenue for the quarter of $134.71 billion, above forecasts of $132.13 billion, thanks to strong digital sales.
Online sales for the quarter increased by 79%, same-store sales rose 6.4%. Net income, meanwhile, hit $5.14 billion, up from $3.23 billion in Q3 last year. Transactions were down over the quarter, dropping by 14.2% year-over-year, but individual tickets increased in value by 24%, as shoppers consolidated what might have been multiple visits into one large shopping trip, due to anxieties about leaving home brought on by the COVID-19 pandemic.
“Changes in customer behavior have accelerated the shift to e-commerce and digital,” Walmart CEO Doug McMillon said on the company’s earnings call. “We were well-positioned to catch and ride these waves given our previous work and investments. Our e-commerce and omnichannel penetration continued to rise, accelerating trends by two to three years in some cases. We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula.”
McMillon noted on the call that nearly 2,500 Walmart stores are now able to to fulfill online orders.
Walmart has implemented a number of updates and safety measures to cater to a consumer base that increasingly favors online shopping and curbside pickup over in-store retail. In June, the retailer partnered with Shopify to allow Shopify merchants to sell their products via Walmart.com with more than 1,200 Shopify merchants expected to join Walmart.com by the end of the year. Notable, Walmart also launched its subscription service, Walmart+, this quarter; the service, which competes with Amazon Prime, offers perks such as free grocery delivery for $98 per year.
The retailer is also looking forward to a future in which digital commerce remains a priority: in September, Walmart unveiled a new store design that features self-checkout kiosks, contactless payment options, and signs that match the categories and icons from Walmart’s mobile app, in an effort to create a seamless omnichannel shopping experience for customers. In Canada, Walmart has planned to invest $3.5 billion in “stores of the future”. The investment will focus on four main areas: modernizing “smarter” stores, accelerating the omnichannel offering by improving the pickup experience, building two new micro-fulfillment centers (and renovating existing centers), and investing in technology to ramp up distribution centers capabilities.