Wal-Mart Stores, Inc
- Author: Zachary Reyes May 23, 2017,
May 23, 2017, 20:40
Wal-Mart Stores Inc on Thursday reported slightly higher-than-expected quarterly sales at established USA stores as customer visits increased and online purchases accelerated. Analyst's mean target price for WMT is $74.56 while analysts mean recommendation is 2.70. That was fueled by a customer traffic increase of 1.5 per cent. Wal-Mart said its grocery business continued to improve, with food categories delivering the strongest sales performance in more than three years.
"Wal-Mart's long string of investments in labor and e-commerce, including acquisitions, are enabling modest market share gains", John Zolidis, director equity research with the Buckingham Research Group said. Looking at the stock's movement on the chart, Wal-Mart Stores, Inc. recorded a 52-week high of $76.78. The share price of the stock surged 11.00% for the year. "At Walmart U.S., the 2.9% increase in net sales equates to an additional $2.1 billion taken over the first quarter - an impressive achievement given 2016 included an extra day of trading from the leap year".
Wal-Mart said sales at US stores open at least a year rose 1.4 percent, excluding fuel price fluctuations.
Total revenue was $117.5 billion, an increase of 1.4%. Energy companies rose as the price of crude oil headed higher.
President and CEO Doug McMillon said he was encouraged by the "solid" quarter, with the retailer now "moving faster to combine our digital and physical assets to make shopping simple and easy for customers" as it deals with a retail market where the once dominant gorilla is now only half the size of new silverback Amazon. Grocery accounts for almost 53 percent of overall revenue for the retailer.
Online sales rose 63 percent, an acceleration from previous quarters. The Dow Jones industrial average added 56.09 points, or 0.3 percent, to 20,663.02.
USA e-commerce chief Marc Lore told reporters in a call that online sales growth was boosted by offering free two-day shipping without membership fees, and higher repeat orders.
And it underscores Wal-Mart's efforts to narrow the gap between itself and online leader Amazon, and widen the distance between itself and other competitors. Wal-Mart bought Jet.com in September for $3.3 billion and has since bought up smaller e-commerce sites such as Modcloth, Moosejaw and ShoeBuy.
The costs of those initiatives have pressured earnings in recent quarters, and the company reported earnings of US$3 billion in the first quarter of fiscal 2018, down 1.3 per cent from the year-ago period. Consolidated net income fell to $3.04 billion from $3.08 billion due to an increase a higher tax rate.
Wall Street expects Wal-Mart Stores Inc (NYSE: WMT) to report quarterly earnings at $0.96 per share on revenue of $117.74 billion before the opening bell. Brent crude, used to price worldwide oils, was up $1.04, or 2 percent, at $53.55 a barrel in London.
Walmart's upbeat results came after disappointing earnings reports from JCPenney, Macy's, and Nordstrom and against a backdrop of overall distress in the retail industry marked by sliding sales and traffic.