Walmart Lifts Full-Year Outlook, Warns of Higher Costs

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00:00Walmart reporting third quarter earnings that beat estimates as it continues to capture more

00:04high-end consumers. David Bellinger of Mizzou has an outperform on the stock, a 1.15 price target,

00:11and David joins us now for more. David, good morning.

00:13Good morning.

00:13What was your first reaction to what we heard this morning?

00:15Look, this was a really solid quarter. So you had same sort of sales growth in the U.S. up 4.5%.

00:21Some of the buy side numbers were maybe closer to 5, so it didn't hit the highest of expectations,

00:26but they did raise the guidance. You had this nice e-commerce growth acceleration as well.

00:32The U.S. e-commerce growth for Walmart's been growing around 20%. This quarter was 28, so a nice step up.

00:39Within that, the really good number was paid delivery. It was up 70%, 7-0. I thought that was a typo when I first saw it.

00:45It's a big number, really good, and it shows you that the mid-upper-income consumer is spending a lot at Walmart.

00:51Whose lunch are they eating right now?

00:53Well, it's widespread, really. Target's got a lot of issues.

00:58I think they're really, you know, Walmart's really narrowing the gap versus Amazon here, right?

01:03They've got a great, fresh business, great grocery business.

01:07Well, Amazon's trying to come back and fight back a little on grocery,

01:10but Walmart's clearly the leading player in that space,

01:14and I think that's where they get this frequency of purchasing,

01:16and then it leads to other discretionary-type items.

01:19I'm glad that you mentioned Amazon. It does seem like Walmart wants to really emphasize

01:23that its main competitor is Amazon, not Target, by listing on the NASDAQ rather than the New York Stock Exchange.

01:30Do you think that that's a feasible comparison, that that truly is what's going on,

01:34that Walmart's biggest competitor right now is Amazon,

01:36and Walmart is essentially as much a tech company as it is a retailer?

01:39I'd absolutely agree. Amazon's their biggest competitor.

01:43Walmart is a retailer. I know they try to talk about themselves as a tech company.

01:47They're incredibly tech-enabled, right?

01:49They're very well ahead of the game versus others.

01:52One thing that we spent a lot of work on is this agentic technology and agentic shopping

01:56and what that can mean, and Walmart's really going all in on this,

02:00spending a lot of time, a lot of resources.

02:03Amazon's been pretty opposed to this initially,

02:05that maybe they want to protect their advertising business.

02:08It's $60 billion-plus dollars of revenue, really high margin.

02:11So I think Walmart sees that as their true potential to step in and narrow that divide

02:18and basically get a lot of people shopping through this agentic technology.