Walmart beats same-store sales estimates on buoyant online demand

Walmart Inc posted a bigger-than-expected increase in quarterly same-store sales on Tuesday as a 79% surge in its online business powered overall rises in spending on electronics, apparel and groceries.

Sales at US stores open at least a year rose 6.4%, excluding fuel, in the third quarter ended Oct. 31. Analysts had estimated an increase of 4.16%, according to IBES data from Refinitiv.

The surge in demand for essentials at Walmart seen at the peak of the coronavirus lockdowns has carried into the second half of the year, with consumers relying on its same-day delivery options and store pick-up services to buy everything from groceries to sneakers.

"We think these new customer behaviors will largely persist and we're well positioned to serve customers with the value and experience they're looking for," Chief Executive Officer Doug McMillon said in a statement.

The COVID-19 pandemic has also forced retailers to drastically rethink how they do business during the key holiday season, with many big retailers including Walmart, Kohl's and Target moving their promotions up to as early as October.

Walmart said on Tuesday it had incurred about $600 million in additional COVID-19 expenses that included higher wages for warehouse workers and bonuses for store employees, as well as spending more on keeping its facilities clean. The retailer had recorded about $1.5 billion in such expenses in the second quarter.

Still, operating income jumped 22.5% to $5.79 billion in the third quarter, while Walmart reported adjusted earnings per share of $1.34.

Total revenue rose 5.2% to $134.71 billion, beating estimates of $132.23 billion.