Walmart (NYSE:WMT) is still firmly in growth mode. The world's biggest retailer last week announced earnings results that returned it to the market-thumping growth that investors had witnessed for most of the past year following a slight slowdown in the fiscal second quarter.

The robust sales volumes paired with strong profitability to put Walmart on track to exceed its prior earnings outlook, even as management pours resources toward growth initiatives like same-day delivery. It should support more healthy returns for shareholders, too.

Let's dive right in.

A woman looking at her shopping list while in a grocery aisle.

Image source: Getty Images.

More market-share gains

Walmart's comparable-store sales growth ticked back up above 3% after falling just below that number last quarter. For investors keeping track, the chain has enjoyed over 3% comps gains in five of the last six quarters. The growth picture is more clearly positive when you zoom out a bit, with comps rising by over 6% on a two-year basis in five of the last six quarters.

That success is partly powered by surging e-commerce demand, but also by increased market share in the grocery section against peers like Kroger.  The supermarket giant's 2% comps rate in recent quarters reflects sustained losses to Walmart's revamped fresh food section. "Our customers' economic health appears solid," CFO Brett Biggs said in prepared remarks, "and our competitive position is strong."

Expenses and cash flow

Executives had mostly good news to report on Walmart's financial strength. Gross profit margin came in above targets thanks to increased efficiency both in stores and online. It also helped that Walmart's private brands are continuing to gain traction with shoppers.

Overall, the profit picture was positive, with income rising in the U.S. division for the sixth consecutive quarter, and with the Sam's Club division seeing its fastest expansion rate in three years. Those gains were offset by the international segment , which is still being pressured by soft markets like the U.K., Canada, and now Chile. "We like the momentum we see in parts of the business," management said while highlighting opportunities for improvement in places like Canada and in the merchandise categories of the e-commerce sales channel.

The holiday setup

Walmart just kicked off what's likely to be a successful holiday growth plan that relies heavily on its multichannel sales posture. This year's peak shopping period will be the first one to benefit from a robust network of connected shopping offerings. Walmart is entering the season with over 3,000 stores serving same-day pickup and 1,400 locations that offer home delivery. CEO Doug McMillon and his team plan to make full use of that unique infrastructure to win business from convenience-minded customers in the fourth quarter.

But while that e-commerce growth is attractive, the better news for investors is that Walmart is finding more ways to extract value from its existing supercenter store footprint. Just this past quarter, those included a delivery membership program and the test launch of in-home delivery, which fills refrigerators while customers are away at work.

Innovations like these are supporting higher customer traffic across the business while keeping rivals like Kroger on defense. And Walmart is demonstrating that it can roll them out while still delivering profit growth and healthy returns to investors. More wins like that should support a continued market-beating performance for the stock.

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