Walmart surpasses Q3 expectations amid Covid, revenue grows 5.3% to $134 bn

Walmart turned out another stellar quarter as the world's largest retailer powers through a pandemic that has felled other national chains.

Third-quarter profits surged 56% and revenue hit $133.75 billion, a 5.3% increase. Both were better that Wall Street had projected. Online sales spiked nearly 80% after nearly doubling in the previous quarter.

Sales at stores opened at least a year rose 6.4%.

It is a promising sign for Walmart ahead of the coming holiday season and the quarter provides more evidence that its expansion into online grocery is widening the gap with rivals.

Still, the Bentonville, Arkansas, company faces increasing challenges from Amazon.com, which on Tuesday opened an online pharmacy that will challenge Walmart's own business.

The potential impact of Amazon's arrival in the pharmaceutical space rippled through that sector immediately. Before the opening bell, Shares of CVS Health Corp. fell almost 7%. Walgreens and Rite Aid tumbled 10%.

Americans have come to rely on big box stores like Walmart, Home Depot and Target, as well as Amazon, as lifelines during the start of the pandemic. Because of what they could offer they remained open even when hundreds of other retailers where ordered closed.

Customer loyalty has grown stronger even as those lockdowns were lifted, but infections are surging again and that could deal another round of pain to most retailers.

The big box stores, however, will in all likelihood remain open and an aggressive push into online sales is making them even stronger heading into the holiday season.