good morning.
Walmart is the largest retailer in the United States, so its quarterly results provide insight into consumer spending. And now those earnings present an economic warning.
3 months until October 31st, Walmart reported strong quarterly results Thursday.r Consolidated sales were $160.8 billion, an increase of 5.2% year over year. The retailer beat Wall Street expectations for $159.13 billion. His profit for the quarter was $453 million.
Walmart US Comp sales increased 4.9% compared to the same period last year, and e-commerce increased 24%, led by pickup and delivery. The company raised its full-year earnings per share forecast to $6.40 to $6.48. Previous guidance was $6.36 to $6.46.
But John David Rainey, Walmart’s executive vice president and chief financial officer, said on an earnings call that shoppers’ purchases slowed in late October, in contrast to spending patterns earlier in the quarter. I commented.
So what does that give?
“It’s hard to say at this point,” Rainey told me in a conversation after Walmart’s earnings call. “I think there are some things to consider.” Extreme weather in late October may have been a contributing factor, he said. For example, he explained, the store has winter clothing, but it’s still hot outside.
“But there is a lot going on in the broader economy, including credit tightening, consumer balance sheets returning to pre-pandemic levels, and even student loan repayments, all of which could be having an impact. there is.”
Rainey continued, “November has been pretty good so far. But the last two weeks of October were off all the trends we’ve seen so far. And we’ve been gaining share. So we believe it’s bigger than just our business. In certain categories, we’re performing much better compared to what’s happening in the retail industry. I understand this.”
Based on the findings, “we could see a little more volatility as we look at the fourth quarter,” he said.
On October 1, the government’s three-year suspension of federal student loan payments ended. A new research paper published by TransUnion and Boston Consulting Group says restarting payments will have a “significant impact” on credit risk for student loans and other consumer financial products such as credit cards and personal loans.
According to the report, “between 500,000 and 1.4 million consumers are expected to fall into serious arrears on one or more credit products,” depending on their level of enrollment in the government’s income-related repayment plans. . The researchers also predict that “an additional 191,000 to 600,000 credit card users will fall into serious delinquency on at least one card” over the next 12 months, the report said. states.
Rainey said Walmart continues to invest in advanced technology, such as supply chain automation, and is starting to see productivity benefits.
One example, Rainey said, is the automatic loading of pallets onto trucks at distribution centers before being delivered to Walmart stores. He said the new technology is efficient and can reduce the time employees spend doing manual labor, such as unloading trucks and sorting trailers, by about 80%.
Have a nice weekend.
Cheryl Estrada
sheryl.estrada@fortune.com
Leader board
Notable developments this week
lauren dillard He was promoted to CFO at LiveRamp (NYSE: RAMP), a data collaboration platform. Mr. Dillard has been with LiveRamp for nearly 10 years, most recently serving as Interim CFO and SVP of Finance and Investor Relations.
Chris Rookers He has been appointed CFO of RWS Global, which provides live experiences around the world. Mr. Lucraz is the former CFO of NBCUniversal’s production and operations division. He joins RWS Global with over 20 years of experience in a variety of leadership roles, from Vice President of Operations at Rockefeller Center to SVP and CFO.
jennifer foxThe chief financial officer (CFO) of biopharmaceutical company Nuvation Bio Inc. (NYSE: NUVB) will step down from his position effective November 27 to pursue new opportunities. Mr. Fox submitted his resignation on November 9th. The company’s finance team will assume the duties and responsibilities of the CFO office, according to members of the executive management team and the company.
jeff shepherd Appointed CFO of Subway, a multinational fast food restaurant franchise. Shepherd will succeed Ben Wells, who will retire at the end of the year after a 46-year career. Most recently, Shepherd served as his EVP and CFO for Advance Auto Parts.
Marc Secor, EVP and CFO of Horizon Bancorp, Inc. (Nasdaq GS: HBNC), is stepping down from his position. This transition comes at a time of restructuring. Mr Secor will continue in his role until his successor is appointed and will provide interim support until April 30th. The company began a national search for a new CFO.
William C. (BJ) Roche IIIHe has served as both president and CFO of Live Oak Bank, and will take on the additional role of president of Live Oak Bancshares on November 14, retiring as CFO at the end of this year. The company’s board of directors announced that Walter J. Pfeiffer will become CFO of Live Oak Bancshares and Live Oak Bank, effective January 1.
Daryl Stem has been appointed CFO of SmartRent, Inc. (NYSE: SMRT), a provider of smart home and real estate operations solutions. Mr. Stem has served as the company’s Vice President of Finance since 2021, bringing 40 years of experience to the role. Prior to joining SmartRent, he held senior finance positions at Best Western Hotels and Invitation Homes, Home Director, Inc. and Catalyst Semiconductor, Inc. where he served as CFO.
big deal
NTT Data’s report, Innovation Index 2023: How North American organizations are achieving growth, value, and high performance, identifies the key drivers of innovation and how organizations focus resources to support them. We are investigating the location.
The study identified “innovators,” with 11% of surveyed organizations exceeding expectations in their innovation investments compared to the rest of the market. This group is highly profitable, with 54% more innovators achieving a net profit margin of 10% more than the rest of the market. For example, 78% of innovators made progress in creating systems and infrastructure to support their innovation.
According to the report, innovation relies on data to power technologies such as predictive analytics and generative AI. The findings are based on a survey of 1,000 North American executives from a variety of industries and company sizes.
Provided by: NTT Data
even deeper
here are some luck weekend reading:
“Forget the gloom of the 1970s—UBS thinks the U.S. economy is returning to the booming Clinton era of the 1990s” by Eleanor Pringle
“This chart shows why Millennials, the largest generation in American history, will continue to drive home prices higher for years to come.” (Alena Botros)
“Brian Chesky: Airbnb’s ‘holy grail’ is to become an AI travel agent” by Michal Levrum
“Jay Shetty, host of the acclaimed podcast On Purpose, launches a masterclass on navigating change. Here are his three keys to overcoming uncertainty” by Alexa Mikhail
overheard
“AI has the power to democratize access to financial services previously reserved for a select few, create true personalization, and meaningfully improve financial literacy.”
—Lauren Kolodny, co-founder and managing partner at Acrew Capital, writes: luck Opinion article. Kolodny leads the company’s fintech operations.