Walmart is trading 4% higher, pushed Dow futures higher, after reporting Q3 earnings that beat expectations on the top and (adjusted) bottom line – in big part due to the recent hurricanes – while boosting Q4 guidance, despite reporting a decline in profit margins.

The company reported GAAP EPS of $0.58, which however management claimed had to be adjusted for a charge of $0.29 for loss on extinguishment of debt in connection with the company’s recently completed debt tender offer, a charge of $0.09 based on discussions with government agencies regarding the possible resolution of the FCPA matter, and a charge of $0.04 based on the decision to exit certain properties in one of the company’s international markets. As a result, WMT’s non-GAAP Q4 EPS was $1.00, beating the $0.97 expected by Wall Street, as well as its own prior guidance of $0.90-$0.98.A major part of the beat, however, was a one time item: as the company said, Hurricane-related impacts benefited comp sales by approximately 30-50 basis points.

Total revenue was $123.2 billion, an increase of $5.0 billion, or 4.2% from a year prior, and higher than the $121.1 billion expected (the number includes $1.04b from membership and other income).

There were less good news in the margin line which declined again: gross margin rate declined 36 basis points in the quarter. “The margin rate was pressured by the continued execution of our price investment
strategy and the mix effects from our growing eCommerce business. In addition, we estimate that hurricane-related impacts contributed to about one-third of the overall decline.”

Additionally, WMT’s free cash flow continued to decline, and for the 9 month period ended Sept 30, WMT saw FCF decline from $12.322BN in 2016 to $10.152BN in 2017.

Back to the good news, which was mostly in E-commerce, where sales were up 50%, while GMV rose 54%, “mainly driven by Walmart.com”, with the company noting it now has more than 1,100 online grocery locations.