What’s going on?
Walmart, the world’s biggest retailer by revenue, thanked investors and invited them to come again with third-quarter earnings on Thursday that exceeded expectations.
What does this mean?
The retailer, which makes most of its money in the US selling groceries, saw its stores’ third-quarter sales rise 3.2% from a year ago – more than analysts predicted. That marks its 21st consecutive quarter of growth, a feat no other American retail chain has achieved. Ecommerce growth also beat forecasts, and the retail giant’s total profit was higher than expected too. That’s despite rising costs as Walmart invests more in fast and flexible delivery both home and abroad – costs that dinged Amazon’s profit last quarter.
Why should I care?
The bigger picture: Walmart isn’t just Walmart.
Last year, Walmart bought stakes in two online retailers: India’s Flipkart and China’s JD.com. Those purchases have set it up to take on Alibaba, China’s answer to Amazon. And just as Amazon can take much of the credit for introducing Black Friday to shoppers around the world, Alibaba is to thank for Monday’s Singles’ Day – which brought the company $38 billion in sales. That might help the Chinese giant’s forthcoming Hong Kong share sale, which aims to raise another $15 billion.
For markets: Check Walmart out.
Owners of Walmart’s stock were likely pleased to see its price rise on Thursday. Its better-than-expected results were accompanied by an increased profit forecast for the rest of 2019, which has become tradition for Walmart at this time of year. That bodes well for its holiday shopping season, even as rival Amazon appeared to be more pessimistic. Investors may also have taken heart from Walmart’s UK update. Sales at the retailer’s British grocery chain Asda fell last quarter, but things could’ve been worse: data out on Thursday showed UK retail sales in October unexpectedly fell, but food sales were resilient.
Originally Posted on November 14, 2019 – Kwik-E-Walmart
Disclosure: Interactive Brokers
Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.