Walmart puts Amazon on notice amid Flipkart bad news

Walmart Inc. sailed into the US holiday season with stronger-than-expected sales and a boosted full-year outlook, signalling that the world’s largest retailer can more than hold its own against rival Amazon.com Inc. in the critical holiday weeks ahead. Comparable sales for Walmart stores in the US—the best barometer of the company’s performance—rose 3.4% in the third quarter, beating analysts’ estimates. It now sees the measure growing at least 3% this year, better than the previous guidance of “about 3%.”

Walmart’s international division got some unwanted attention this week when Binny Bansal resigned from running its just-acquired Indian e-commerce unit Flipkart. India is a promising market for Walmart, particularly online as regulations limit its ability to operate traditional stores. But Amazon is also spending billions to reach the millions of smartphone-toting Indian consumers.

As its food business goes, so goes Walmart. And it’s been going well lately—thanks to price cuts, refurbished produce displays and a rapid rollout of curbside grocery pickup, now available at nearly 2,100 stores. Shoppers like the convenience, and the service has attracted new customers.

E-commerce sales came in ahead of Walmart’s full-year forecast, growing 43% in the US.

Now, the company needs to avoid the supply-chain snafus that its website suffered during last year’s holiday season, which hampered growth and worried investors.

Walmart’s optimistic about the critical holiday period, with chief executive officer Doug McMillon citing “momentum in the business” and a “benefit from a favourable economic environment in the US”.

As Christmas approaches, the retailer boosted its full-year adjusted earnings per share outlook to $4.75 to $4.85 from $4.65 to $4.80 earlier.

Market reaction

Gloomy results from peers Dillard’s and J.C. Penney pulled Walmart shares down 2.2% Thursday, despite the world’s largest retailer beating same-store sales estimates and raising its full-year outlook.