Walmart U.S. sales up 3.8% in Q3 as company focuses on 5 pillars for growth
BENTONVILLE, Ark. — Walmart U.S. on Tuesday reported a net sales gain of 3.8% to $72.7 billion for the third quarter ended Oct. 30. Same-store sales were up 1.5%, reflecting a 1.7% lift in traffic but a 0.2% decline in ticket. Overall sales totaled $116.6 billion, a decline of 1.3%. Quarterly sales for Walmart's International division were down 11.4% to $29.8 billion and sales at Sam's Club were down 2.2% to $14.1 billion.
One of the most important takeaways from this morning's result announcement is the improvement in U.S. operations, Doug McMillon, Walmart president and CEO, told analysts Tuesday morning.
“In addition to positive comp sales, Walmart U.S. had its fourth straight quarter of positive traffic," he said. "We’re now lapping positive comp sales and building on our progress. Our customers are telling us that our efforts around clean, fast and friendly are resonating.”
McMillon outlined five key areas that Walmart is targeting for growth:
Value. "We’ve won on value in the past and that won’t change," he said;
Convenience. "Convenience is increasingly important as customers want to save both money and time.";
Merchandising excellence. "We will always work to be great merchants - whether in stores or online.";
Regions. "Fourth, we’re focused on the key geographies for customer growth, which are North America and China."; and
Broad demographic appeal. "Finally, we want to appeal to a blend of income levels. The way we’re approaching e-commerce, Neighborhood Markets, Sam's Club, grocery pickup, and other areas will appeal to value conscious customers of all demographics. We already serve customers from all income levels around the world but we have an opportunity to get even stronger."
“By taking these steps, we will grow the company faster. We will add between $45 billion to $60 billion of revenue to the company in the next three years," McMillion said. “We are excited about the unique opportunity we have to create a seamless shopping experience for our customers and ensure sustainable growth for the business. We’re making critical investments to better serve our customers, associates and shareholders, and we are on the right path.”
Particularly in e-commerce, Walmart U.S. made significant strides in deepening the digital relationship with the customer, Greg Foran, president and CEO Walmart U.S., told analysts.
“This quarter, we accelerated our online grocery pickup offering to 85 additional locations. We now have almost 140 locations across 25 markets that offer the customer the ability to order their groceries online and conveniently pick up at a time of their choosing,” he said. “And just in time for the holidays, we introduced a digital wish list that can be built at home or by simply scanning items while at the store.”
Improvements are being made in-store as well, Foran noted. For example, improved in-stock positions in vitamins helped drive sales, Foran said, as part of an overall improvement in pharmacy and OTC.
Pharmacy and OTC were also key growth drivers for Sam's Club, Rosalind Brewer, the division's president and CEO, reported.
“Health and wellness and consumables benefited from innovation and newness,” she said. “In pharmacy, the free/4/10 prescription program continued to drive growth in script counts. New items in OTC led to a solid performance in the quarter, and products like protein powder drove good results further supporting our initiatives around ‘healthy for you.’”