Walmart puts up strong Q3, announces opioid settlement

Nov 14, 2022, 2:57 PM | Updated: Nov 15, 2022, 10:43 am
FILE - In this Feb. 18, 2020 file photo, the logo for Walmart appears above a trading post on the f...

FILE - In this Feb. 18, 2020 file photo, the logo for Walmart appears above a trading post on the floor of the New York. Walmart reports quarterly financial results reports quarterly financial results Tuesday, Nov. 15, 2022. (AP Photo/Richard Drew, File)

(AP Photo/Richard Drew, File)

NEW YORK (AP) — Walmart reported higher sales in its fiscal third quarter as more Americans look for deals, particularly in groceries, in the face of high inflation.

The nation’s largest retailer raised its full-year earnings outlook on the strong quarterly results.

Also on Tuesday, Walmart agreed to pay $3.1 billion to settle lawsuits nationwide over the impact of prescriptions its pharmacies filled for powerful prescription opioid painkillers. The agreement must still be approved by 43 states, but company shares jumped more than 7% in midday trading.

The settlement is similar to those already announced by CVS Health and Walgreen Co. Walmart said in a statement that it strongly disputes the allegations and that the settlement doesn’t include any admission of liability.

Walmart is among the first major retailers to report fiscal third-quarter results and is considered a barometer of spending given its size, so analysts carefully parse through the data. Home Depot reported on Tuesday that revenue and profit easily topped expectations. But investors were spooked after the nation’s largest home improvement retailer stuck by projections it put out earlier this year.

Walmart CEO Doug McMillon told analysts on a call that the holiday season will be more promotional and it will be prepared to react to any stepped up discounting. Right now, the fate of the holiday shopping season is still unclear.

“It’s still mid-November and there’s a lot of room between now and the end of the holidays including new year,” McMillon said. “This will be one of those years where we’re watching sales closely up until the last minute of Christmas Eve.”

Target is slated to report results on Wednesday, while Macy’s and Kohl’s are among the merchants set to report financial performance on Thursday.

Amazon said late last month that it returned to profitability in its third quarter after two straight quarters of losses, but it also posted weaker-than-expected revenue and issued disappointing projections for the current quarter.

Like many other retailers, Walmart benefited in the early days of the pandemic as shoppers spent heavily to furnish their homes or buy casual clothing as they stayed indoors.

But spending has since shifted away from casual clothes and TVs to necessities. Americans have remained mostly resilient even with inflation near four-decade highs. Yet surging prices for everything from mortgages to rent have increased the anxiety level, while offering less wiggle room to spend on electronics and new clothes.

That shift away from discretionary goods has hurt profits since general merchandise carries higher profit margins. The dramatic swing has also left Walmart and other stores with an excess of items that shoppers don’t want — and that they need to clear.

Walmart said it is trying to control prices where it can and noted that the cost for a basket of staples for a traditional Thanksgiving meal is the same as a year ago. It has also made significant headway in reducing inventory.

Walmart noted that shoppers are trading down to private brands in baby items and baking goods, among other categories. It is also seeing wealthier customers. About three-quarters of Walmart’s market share gains in food came from customers with annual household incomes of $100,000 or more, the company said.

“With the cost of everyday items still stubbornly high in too many categories, more customers and members are choosing us for the value and assortment we’re known for,” McMillon told analysts on a call following the release.

McMillon noted the company is working to retain higher-income shoppers when inflation ebbs by making sure that the groceries and clothing assortments are fresh.

Walmart said it’s also looking to newer businesses like its third-party marketplace and advertising to drive growth. In the U.S., Walmart’s marketplace now offers 370 million different types of items, up from 50% from the second quarter.

Walmart, based in Bentonville, Arkansas, lost $1.79 billion, or 66 cents per share, for the quarter ended Oct. 31, including the opioid settlement. That compares with a profit of $3.11 billion, or $1.11 per share. Adjusted profit totaled $1.50 per share, which handily beat analysts’ estimates for $1.32 per share.

Sales rose 8.7% to $152.81 billion, above estimates of $147.7 billion, according to FactSet.

Comparable sales — those from established stores and online operating over the past 12 months — rose 8.2%, higher than the 6.5% in the previous quarter. Online sales rose 16%.

The company said that its adjusted full-year earnings per share is now expected to decline by 6% to 7%, instead of the 9% to 11% it predicted in August.

The company also announced a new $20 billion share-buyback authorization. It ended the third quarter with roughly $1.9 billion left.

Shares rose $10.15 to $148.60 at midday trading.


AP Writer Geoff Mulvihill in New Jersey and AP Business Writer Michelle Chapman in New York contributed to this report.


Follow Anne D’Innocenzio:

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Gas prices are advertised at over eight dollars a gallon at a gas station Thursday, Oct. 6, 2022, i...
Associated Press

California lawmakers to meet, eye big oil’s high gas prices

SACRAMENTO, Calif. (AP) — Furious about oil companies’ supersized profits after a summer of record-high gas prices, California Gov. Gavin Newsom on Monday will formally start his campaign to punish big producers by asking the Legislature to fine them and give the money back to drivers. State lawmakers will briefly return to the state Capitol […]
21 hours ago
FILE - This undated photo provided by the Tarrant County, Texas, Jail shows Aaron Dean. The former ...
Associated Press

Trial to start for Texas cop who shot Black woman in home

FORT WORTH, Texas (AP) — A white former police officer is set to go on trial Monday for fatally shooting a Black woman through a rear window of her Texas home while responding to a call about an open front door in a case that has faced years of delays. Fort Worth Officer Aaron Dean […]
21 hours ago
Associated Press

Today in History: December 5, Nelson Mandela dies at 95

Today in History Today is Monday, Dec. 5, the 339th day of 2022. There are 26 days left in the year. Today’s Highlight in History: On Dec. 5, 2013, Nelson Mandela, the anti-apartheid leader who became South Africa’s first Black president, died at age 95. On this date: In 1791, composer Wolfgang Amadeus Mozart died […]
21 hours ago
A man waits for a traffic light to change, standing near monitors showing Japan's Nikkei 225 index ...
Associated Press

Asian shares gain, oil prices up after Russia price cap deal

Asian shares were mostly higher and oil prices rose Monday after the European Union and the Group of Seven democracies agreed on a boycott of most Russian oil and a price cap of $60 per barrel on Russian exports. Hong Kong’s benchmark jumped 3.7% and the Shanghai Composite added 1.6%. Hopes for fewer disruptions to […]
21 hours ago
Villagers stand on an area covered in volcanic ash as Mount Semeru looms in the background in Kajar...
Associated Press

Indonesia’s Mt. Semeru eruption buries homes, damages bridge

SUMBERWULUH, Indonesia (AP) — Improved weather conditions Monday allowed rescuers to resume evacuation efforts and a search for possible victims after the highest volcano on Indonesia’s most densely populated island erupted, triggered by monsoon rains. Mount Semeru in Lumajang district in East Java province spewed thick columns of ash more than 1,500 meters (nearly 5,000 […]
21 hours ago
FILE - Bob McGrath, right, looks at the Cookie Monster as they accept the Lifetime Achievement Awar...
Associated Press

Bob McGrath, ‘Sesame Street’ legend, dies at 90

Bob McGrath, an actor, musician and children’s author widely known for his portrayal of one of the first regular characters on the children’s show “Sesame Street” has died at the age of 90. McGrath’s passing was confirmed by his family who posted on his Facebook page on Sunday: “The McGrath family has some sad news […]
21 hours ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Walmart puts up strong Q3, announces opioid settlement