All right Walmart out with better than Expected results but we're seeing shares Under Pressure some concerns about the Company's Outlook let's bring in really The man of the hour for us here at yaho Finance that is Walmart CFO John David Rainy John David always nice to get some Time with you so Market concerned a Little bit about about the outo are you Seeing things in the business in recent Weeks that that would justify what the Market is suggesting this Morning well good morning Brian it's Great to be on the show first of all I Want to say we're really pleased with Our quarter we exceeded our expectations On both sales and EPs and so I think our Value proposition clearly is resonating With customers but what we called out on The call was that we did see during the Last two weeks of October some trends That were a little different than uh the First part of the quarter uh we've seen Consistent growth pretty consistent each Month of the quarter in most categories Of our business as we got into the back Half of October we saw that slip a Little bit and sometimes that can be Related to unseasonal weather could be Related related to other things that are Happening in the economy and so we Called that out uh because it was a Little bit different than what we've Seen for the first part of the year that
Said as we look into November and Particularly around some of the events That we've had for our holiday shopping We've seen pretty good strength and so What that tells me is that the consumer Is being Discerning maybe choiceful and Buying these more discretionary items These larger ticket items and they're Leaning into these promotional or Holiday type events to buy those items And the shoulder periods around that are A little bit slower than what we've seen Previously that uh that change in in Sales Cadence John David do you Attribute that to student loans kicking Back in in October well you know that probably Affects our business less than others But there are something like 27 million Americans I think it's roughly 10% of The US population that are affected by Student loans and uh the estimates that I've seen suggest that that's somewhere Between five and8 billion doar a month In actual student loan repayment so There's no doubt it has some effect uh But you've also got some other things That are happening we're we're reaching That point where we're about a year After the FED has started tightening and That's generally accepted that that's The period of time that it begins to Take more an effect on the consumer We're also seeing consumer balance
Sheets that are getting back to the Level they were pre pandemic I think Some of the resilience in consumer Spending up to this point has been Because of stronger balance sheets so There's a lot of mixed signals out there Overall our business is performing well We're seeing strong growth in many Aspects of our business in particular When we look at November month to date Here some of the categories that have Been weaker year-to date apparel home Electronics we've actually seen Strengthen and particular strengthen our Marketplace business which has double- Digit sales in many of those areas and So that what what that tells me is that Customers are choosing Walmart we're Gaining share they're coming to us for Value and convenience but broadly There's some stress on the consumer John David when it comes to some of those Improving trends that you are seeing I Guess how optimistic are you that that Can continue as you look ahead to 2024 And some of the relief maybe that you Are starting to hopefully see on the Consumer what does the timeline of that Look Like well when we talk about relief on The consumer I think the first thing That we need to talk about is inflation We've seen High inflation for two years Now when we look at the month of October
Broadly across the categories of our Business inflation is about 2% so much Better than what it was and you actually Have to look at that by category to Really understand what's happening so Food and consumables tend to be in that 2 to 4% range general merchandise is Actually we've seen a pretty sharp drop Off just in the last couple weeks where That is deflating year-over-year so Prices are less than where they were a Year ago and actually getting pretty Close to where they were two years ago And so what the impact that that's had On the consumer is they've had less Money their wallets have been stretched More thinly because of higher prices and So theyve focused on those things that They need versus the things that they Want and so as that pertains to the Period of time that we're going into Right now the holiday shopping period They're they're waiting for these Holiday specials for these big events to Buy those bigger ticket items those TVs Those homes and the home and electronic Type categories that uh we're seeing Stronger spending in but I think Everything else said like we want to see Lower prices that's good for our Customers we want to be able to pass That along to them and I think the Consumer needs some relief right now and John David there has been that
Stretching of the sales period and some Of those deals starting earlier on I Think Walmart for its own had started Some of those in basically the second Week of October and so all of that Considered when you see kind of a pull Forward of some of those deals and Trying to get consumers in the dur Earlier on perhaps delivering on some of Those holiday orders that they would Have made later in the season how does That change the comps kind of Year-over-year here now especially when You're pulling perhaps the successes of One quarter into a prior quarter yeah It's a great question so much of our Businesses um dependent upon the holiday Shopping period the fourth quarter in General is about 20% larger for us and To your point on Black Friday Black Friday really is no longer a day it's More of a concept we at Walmart started Our events on November 8th um with with More with deals for our customers and Even if you look at the period of time Between Thanksgiving and Christmas we Have an extra day this year that always The storts comps year-over years and so You you tend to look at these things Daily and and look at the trends first Thing in the morning and try to observe What's happening in the business uh so We we'll be watching closely over this The holiday shopping period but I think
For us we're really excited about the Value that we're passing on to our Customers I'll give you an example for For the Christmas uh holiday shopping Period we've got 25 items 25 toys that Are less than $25 and so we want to lean Into these special moments for our Customers and members so that they can Find the value and the items that they Want at Walmart John David thank you for Are finally sticking a fork in Black Friday I've been saying this for the Past decade it's just it doesn't even Exist anymore all these deals are coming Out well in advance months in advance in Some cases but before I let you go um Are you just giving out open-ended Checks on all things AI I I mean I've Seen some stories out recently what Walmart is doing in terms of AI and how It might change your Manu or how your Your warehousing and how you deliver Goods uh how much in terms of investment Are you planning for AI related projects Next year and then do can you point to One that is really going to change how You operate Yeah well I don't think any CFO is going To be saying that they're giving out Open-ended checks on on anything but the Returns around AI are really really Compelling and probably the best example That I will I'll give you is for our Customers when they come uh shop us
They're able to um we're able to present Offers to them and different in Different categories of merchandise that We can see other customers do similar Things that's that's a great way to get Customers to come to us to use our E-commerce channels to buy the things That they want and some of the things That maybe they didn't even know they Wanted when they came shopping for us John David we always appreciate you Taking the time to join us here in Yahoo Finance John David rainy Walmart CFO Thanks so much thank you
