Wal-Mart's Sales Keep Climbing

Walmart Stores profit was down 1.3% during its fiscal year first quarter, but a surge in e-commerce and strong sales in the USA showed how the retailer continues to attract consumers during a challenging time in the industry.

Earnings per share was $1 in the first quarter ended on April 30, exceeding the analysts' average estimate of 96 cents, according to Thomson Reuters I/B/E/S. It forecast earnings per share of US$1 to US$1.08, against market expectations of US$1.07.

Revenues were up 1.4 per cent at $117.5 billion.

Looking forward, for the quarter ending Jul-17, 22 analysts have a mean sales target of 122,705.00 million.

President and CEO Doug McMillon said, "We delivered a solid first quarter and we're encouraged by the start to the year". "We're moving faster to combine our digital and physical assets to make shopping easier and more enjoyable for customers".

Target's first-quarter profit rose nearly 8 percent as attempts to turn its business around appear to be gaining some traction. The share price has moved forward from its 20 days moving average, trading at a distance of 2.99% and stays 6.77% away from its 50 days moving average.

Other bright spots on the retailer's income statement include improved operating income on a constant-currency basis (though down when factoring in the adverse impact of foreign exchange rates). That was fueled by a customer traffic increase of 1.5 percent.

Walmart has acquired several online retail startups in the past year, including the unicorn Jet.com and specialty retailers Moosejaw, ModCloth and ShoeBuy.

Wal-Mart Stores, L Brands and Ralph Lauren all rose early Thursday after reporting better results than analysts were expecting.

The company's stable sales are a marked contrast with many department store retailers and competitors including Target Corp, which said on Wednesday that sales at stores open at least a year fell 1.3% in the first quarter. Sales of general merchandise were down during the three month period due mainly from delays in checks for tax refunds.

Wal-Mart Stores Inc shares were trading at $78.81 per share on Friday afternoon, up $1.27 (+1.64%). Additionally, Wal-Mart also reported positive comparable growth in groceries, due in part to a lack of market deflation in food, excluding price investments.

Wal-Mart's e-commerce sales grew an impressive 63% y-o-y, a significant improvement from 29% in the fourth quarter of fiscal 2017.

Net sales at Walmart International were $27.1 billion, a decrease of 3.5%. The 10-year Treasury yield held steady at 2.22 percent. However, sales of those items strengthened as the quarter progressed.

Among other big movers: Incyte surged 6.9 percent on growing analyst optimism over the biopharmaceutical company's work developing cancer treatments. Importantly, the company said that the majority of the increase came from sales growth at Walmart.com, suggesting fresh momentum at its flagship digital business.

Wal-Mart returned $3.7 billion to shareholders through dividends and share buybacks in the quarter.

The world's biggest retailer just reported its second consecutive earnings beat, and though sales once again fell just a bit short of expectations, comps were solidly higher.

  • Zachary Reyes