Updated at 7:43 AM EST
Walmart WMT posted better-than-expected third quarter earnings Thursday, while lifting its full-year profit forecasts, but hinted at near-term consumer spending softness that sent shares sharply lower in early Thursday trading.
Walmart said adjusted earnings for the three months ending in October came in at $1.53 a share, up 2% from the same period last year and just ahead of the Street consensus forecast of $1.52 a share.
Group revenues, Walmart said, rose 5.2% from last year to $160.8 billion, again topping analysts’ estimates of a $159.6 billion tally. U.S. same-store sales were up 4.9%, the retailer said, firmly ahead of Wall Street’s 3.2% forecast.
Operating profit slipped 2.2% to $5 billion, Walmart said, while gross margin widened 32 basis points, thanks in part to strong demand for its lower-priced products.
CFO John David Rainey told Bloomberg that there’s “still is pressure on the consumer”, adding the retailer is “more cautious on the consumer than we were 90 days ago.”
Looking into the second half of the fiscal year, Walmart sees earnings in the region of $6.40 to $6.48 per share, a two cent improvement to the upper end of its prior forecast, with net sales rising between 5% and 5.5%.
“We had strong revenue growth across segments for the quarter, and we’re excited to get an early start to the holiday season,” said CEO Doug McMillon. “From a Thanksgiving meal that costs less than last year, to great prices on fashion, toys, electronics, and seasonal decorations, we’re here to help families from around the world make this a special time.”
“Looking ahead, our inventory is in good shape, the teams are focused, and our associates are ready to serve our customers and members whenever and however they want to be served,” he added.
Walmart shares were marked 7.53% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $157.00 each, a move that would trim the stock’s six-month gain to around 4.8%
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