Retail boost: Walmart rallies after confident guidance in front of the holiday season

Walmart (NYSE:WMT) pushed higher in early trading on Tuesday after the retail giant topped Q3 expectations and raised guidance in front of the key holiday season.

Comparable sales in the U.S. rose 5.3% to top the consensus estimate of 3.8%. Transactions were 3.1% higher during the quarter, and the average ticket was 2.1% higher compared to a year ago. E-commerce sales rose 27% during the quarter and contributed 290 basis points to comparable sales.

Comparable sales were 7% higher for the Sam’s Club chain to smash the consensus expectation. Notably, Sam’s Club saw strong sales growth across club and digital channels, led by food and health & wellness categories.

International sales for the retail giant rose 8.0% year-over-year to $30.3 billion. Growth was led by Flipkart, Walmex, and China. Transaction counts and unit volumes were up across international markets.

Walmart’s (WMT) global advertising business grew approximately 28% during the quarter, including 26% for Walmart Connect in the U.S.

Walmart’s (WMT) consolidated operating income was up 8.2% due to higher gross margins and growth in membership income. EPS came in at $0.58 to beat the consensus mark of $0.53.

Walmart (WMT) ended the quarter with a cash position of $10.0 billion and total debt of $47.3 billion, inclusive of short-term borrowings, long-term debt due within one year, finance lease obligations due within one year, long-term debt and long-term finance lease obligations. Free cash flow was $6.2 billion. Walmart’s (WMT) inventory level fell 1% year-over-year to $63.3 billion.

Looking ahead, Walmart (WMT) sees full-year sales rising 4.8% to 5.1%. The Bentonville-based company expects full-year EPS of $2.42 to $2.47 (midpoint $2.445) vs. $2.45 consensus.

“We had a strong quarter, continuing our momentum… In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that,” stated CEO Doug McMillon.

Shares of Walmart (WMT) jumped 4.55% in premarket action on Tuesday. Target (TGT), Costco (COST), Dollar General (DG), Best Buy (BBY), and Dollar Tree (DLTR) all showed small early gains.