Walmart's Q3 Earnings Can't Stand Up Against Record Highs

Walmart Inc. (NYSE: WMT) released its fiscal third-quarter financial results before the markets opened on Thursday. The stock hit a record high on Monday, and while earnings topped estimates, investors sent shares lower.

The company said that it had $1.34 in earnings per share (EPS) and $134.7 billion in revenue, which compares with consensus estimates of $1.18 in EPS and revenue of $132.23 billion. The same period of last year reportedly had EPS of $1.16 on $127.99 billion in revenue.

During the latest quarter, Walmart U.S. comparable sales increased by 6.4%, led by strength across key categories, including general merchandise, health and wellness and food. Walmart U.S. e-commerce sales grew 79%, reflecting strong results across all channels.

Sam’s Club comparable sales increased 11.1%. eCommerce sales grew 41%. Reduced tobacco sales negatively affected comparable sales. New member sign-ups and renewal rates were strong, particularly Plus membership. Membership income increased 10.4% year over year.

Walmart International net sales increased 1.3% to $29.6 billion. Changes in currency rates negatively affected net sales by about $1.1 billion.

Walmart has withdrawn its fiscal full-year outlook. However, the consensus analyst estimates call for $5.33 in EPS and $550.17 billion in revenue for the year.

Management noted that the company’s net sales and operating results continue to be affected by the global health crisis. The increased demand for products across multiple categories led to strong top-line and gross margin results.

Shares of Walmart traded down fractionally Tuesday morning at $152.58, in a 52-week range of $102.00 to $153.40. The consensus price target is $149.23.