HomeStrong Q3FY2021 Quarter from Walmart on Both Top and Bottom Line

Strong Q3FY2021 Quarter from Walmart on Both Top and Bottom Line

20 November 2020 By Mircea Vasiu

The earnings season continued this week with some important names; Walmart is one of them. The U.S. retail giant posted strong Q3 FY2021 results, beating all expectations. Moreover, once again, the online sales grew exponentially, well into double digits, confirming the fact that the sector benefited from the coronavirus restrictions and, in some cases, lockdown. 

The company reported $134.7 billion on expectations of $132.42, more or less in line with what the market expected. However, it reported EPS of $1.34 on $1.18 expectations. Also, the U.S e-commerce sales grew by a stunning 79%, and it had a big contribution to the overall company sales. Furthermore, comparable sales in the U.S. grew 6.4% on expectations of 3.9%.

Busy Quarter for Walmart

The company launched Walmart+, a membership offering important benefits to subscribers, like unlimited free delivery or discounts on fuel. At the time of the launch, many compared the Walmart+ membership as the company’s response to Amazon Prime, and they were correct. Judging by the rise in e-commerce sales, we may say that Walmart+’ introduction was a success right from the start.

Walmart continues to innovate. This quarter it announced new drone delivery pilots in the U.S. by partnering with companies such as DroneUp or Flytrex. Also, it announced plans of reaching zero emissions in Walmart operations by 2040, and a new partnership with Goldman Sachs to offer access to capital to online shoppers.

The above are only some of the highlights of what happened at Walmart during the quarter. Coupled with the better than expected earnings, the shares gained in the aftermath of the release.

Analysts welcomed the earnings report too. JP Morgan noted the strong results, emphasizing the growth in operating margin, for example. Another upside worth noting is the ability of Walmart to reduce its losses in the digital business at a rapid rate and the way it keeps up with strong demand in the grocery delivery business. In some cases, Walmart manages to deliver in less than 30 minutes.

All in all, strong performance and yet another solid quarter. Walmart has both the resources and the ability to face the crisis. The fact that the sector is one that wasn’t affected that much by the pandemic also helped.

Walmart becomes just another company that beats earnings in the last quarter. It shows that the pickup in the U.S economic activity continues.