In this file:
· Walmart steals grocery market share in Q3
… Food sales increased $3.6 billion…
· Walmart’s ‘Squishy’ Margins Reveal Pressure Beneath Sales Boom
… surpassed Wall Street’s earnings expectations and the company lifted its outlook again…
· Cramer says Walmart is an ‘inflation fighter,’ Wall Street shouldn’t be selling the stock
… “Walmart is keeping prices down aggressively and therefore their gross margins are down. But they are taking share from everybody,” Cramer said...
· Amazon should be very worried about one growing part of Walmart's business
… Growing its marketplace business to take on Amazon's dominant position has been a key focus by Walmart execs in the past 12 months…
Walmart steals grocery market share in Q3
Maria Monteros, GroceryDive
Nov. 16, 2021
· Walmart's sales continue to grow ahead of the holidays due to strong consumer spending, the rising cost of consumer goods and government stimulus.
· U.S. sales grew to 9.3% year over year in the third quarter to $96.6 billion, with domestic comp sales (excluding fuel) up 9.2% and U.S. e-commerce sales up 8%. Sam's Club comp sales (excluding fuel) increased 13.9%, and e-commerce sales rose 32%.
· The retailer won market share in grocery in the U.S. amid the highest inflation level in 30 years. Sales growth for the category increased nearly 10%, with low- to mid-single-digit ticket inflation benefiting results.
Food sales increased $3.6 billion — the strongest growth recorded in six quarters, CFO Brett Biggs said on the call. Fresh categories, in particular, made solid headway with sales.
One of the main factors contributing to Walmart's growth this quarter is inflation. The Consumer Price Index (CPI) increased at a 6.2% annual rate in October, according to the U.S. Bureau of Labor Statistics.
In a call with investors, Walmart CEO Doug McMillon said the company is able to take advantage of both an inflationary and a deflationary environment...
Walmart’s ‘Squishy’ Margins Reveal Pressure Beneath Sales Boom
Retailer says transactions, ticket size increased in quarter
‘Fighting inflation is in our DNA,’ McMillon tells analysts
By Brendan Case, Bloomberg
November 16, 2021
Walmart Inc. surpassed Wall Street’s earnings expectations and the company lifted its outlook again, but the retailer signaled that global supply-chain snarls and rising inflation are taking their toll.
The company’s gross margin, a broad measure of profitability, fell slightly in the third quarter, according to an earnings statement Tuesday. Chief Executive Officer Doug McMillon acknowledged that Walmart will have to work hard to mitigate rising prices and said, “fighting inflation is in our DNA.”
McMillon’s tone underscored Walmart’s confidence as it navigates scarce transportation capacity, a labor squeeze and rising fuel costs that are combining to spur the fastest growth in U.S. consumer prices in three decades. That points to upbeat prospects for the crucial holiday shopping season despite the potential drag on profits from rising inflation.
“Margins were a little squishy and will be picked at,” Simeon Gutman, an analyst at Morgan Stanley, said in a note to clients. Still, sales “were strong and better than expected.”
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Cramer says Walmart is an ‘inflation fighter,’ Wall Street shouldn’t be selling the stock
CNBC’s Jim Cramer said Tuesday that Walmart shares should not be lower.
Cramer characterized the move as a Wall Street problem and not an indication of anything wrong with the retail giant’s quarterly results.
“Walmart is keeping prices down aggressively and therefore their gross margins are down. But they are taking share from everybody,” Cramer said.
Matthew J. Belvedere, CNBC
Nov 16 2021
CNBC’s Jim Cramer said Tuesday that Walmart shares should not be lower — characterizing the move as a Wall Street problem and not an indication of anything wrong with the retail giant’s quarterly results.
Shares of Walmart opened down more than 1% and slid further on the notion that the company didn’t raise prices enough in the third-quarter, resulting in disappointing gross margins.
Cramer rejected that premise on “Squawk Box” and “Squawk on the Street,” as well as in his morning Investing Club newsletter, saying Walmart is an “inflation fighter” and a “share taker.”
He praised the retailer for trying to largely absorb increased costs due to product shortages and delays and not passing them onto consumers.
“Walmart is keeping prices down aggressively and therefore their gross margins are down. But they are taking share from everybody,” Cramer said...
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Amazon should be very worried about one growing part of Walmart's business
Brian Sozzi, Yahoo Finance
November 16, 2021
Walmart "flexed its muscles" in an inflationary environment with a solid third quarter out on Tuesday, says Jefferies analyst Stephanie Wissink.
But the world's largest retailer also posed in front of fierce rival Amazon (AMZN) by adding a significant number of new third-party sellers to its Walmart.com business. Walmart (WMT) said it added about 21 million new items to its online marketplace in the third quarter.
Growing its marketplace business to take on Amazon's dominant position has been a key focus by Walmart execs in the past 12 months.
The progress — and potential for market share gains as Walmart is viewed by consumers as a place that has everything just like Amazon — isn't lost on Wissink.
"That's a big increase [in items]. I think it's also reinforcing to the market that Walmart is viewed by merchants and vendors as a marketplace for sellers and a new destination to build value. The customer reach that Walmart has is very much competitive. And the marketplace sellers are finding that the opportunity exists for them to reach those consumers through the Walmart engine. I think that really impressed us, and surprised us in terms of magnitude. I think you start looking at the secondary ecosystem of value creation, Walmart is really starting to put points up on the board," Wissink said on Yahoo Finance Live.
Here is how Walmart performed compared to Wall Street estimates for the third quarter: