Wal-Mart Stores, Inc. (WMT) stock is down 3.29% in premarket trade on Thursday. The retail giant released its Q3 fiscal quarter earnings, posting sales growth for the company’s U.S. stores for the eight quarter straight.
The company’s revenue fell short of investor expectations, causing the stock to fall.
Wal-Mart’s earnings were mostly positive. There are a lot of bright spots for the company going into the final quarter of the year.
1. Sales Grew 0.7% Year-over-Year
The company’s sales grew 0.7% compared to the same period a year prior. Sales for the quarter hit $118.18 billion, missing Thomson Reuters forecast of $118.7 billion. U.S. comparable sales increased 1.2%, slightly missing a 1.3% expectation.
Store traffic increased for the eighth quarter straight.
2. Digital Sales Jump 20.6%
Wal-Mart’s transition into the ecommerce sector has picked up. The company has struggled to regain market share from Amazon (AMZN) and competing retailers. Wal-Mart’s main sales continue to be driven through ground stores, which isn’t expected to change in the near future.
Online sales grew 20.6% excluding currency fluctuations.
Jet.com’s earnings were included in the company’s online sales for half the quarter.
3. Lower End Guidance Raised for the Full Year
Wal-Mart raised its lower end full year guidance from $4.15 – $4.35 to $4.20 – $4.35 a share. The company posted an EPS of $0.98 in the recent quarter, missing the $0.99 a share the year prior. A higher lower guidance is a bright spot for the full year going into 2017.
Wal-Mart’s revenue took a hit due to falling food prices. The retailer is the largest grocer in the United States, and 55% of the company’s sales come from the division. Food price pressure caused comparable sales to fall 1.5% in the grocery division.
The company kept U.S. inventory level leans, reducing inventory in stores by 6% to protect the company’s profit margins.
