Wal-Mart tops 1Q profit forecasts

CHICAGO Wal-Mart Stores Inc on Thursday reported higher-than-expected quarterly sales at established USA stores, as more customers visited the discount retailer and its e-commerce push boosted online purchases, sending its shares up 1.3 percent in early trade.

Total revenues were up 1.4% to $117.5 billion versus the quarter a year previous while net sales were up 1.3% to $116.5 billion.

The results reflected Wal-Mart's efforts to lure customers to U.S. stores through upgrades to infrastructure, better customer service after boosting worker pay, and enhanced e-commerce offerings.

Wal-Mart's USA same-store sales rose 1.4% for the fiscal first quarter - the 11th straight quarterly increase - due to a 1.5% rise in foot traffic, thanks in part to improvements Wal-Mart has made in its stores.

"This is extraordinary growth, and we're pleased with the traction we're generating across our e-commerce offerings", said Brett Biggs, Walmart's executive vice president and chief financial officer.

"We're moving faster to combine our digital and physical assets to make shopping easier and more enjoyable for customers", McMillon said. Shares of Wal-Mart rose 0.8% in pre-market trading to $75.70.

Walmart's stock hits a 52 week high with increased sales

Chief financial officer Brett Biggs said e-commerce is "still fairly small" within Wal-Mart's USA business and there was no immediate plan to disclose more details about the business.

Stocks are modestly higher in early trading on Wall Street as traders were relieved to see some positive results from retailers. Growth in EPS is an important measure of management performance because it shows how much money the company is making for it's shareholders, not only due to changes in profit, but also after all the effects of issuance of new shares (this is especially important when the growth comes as a result of acquisition). Target reported higher-than-expected quarterly earnings and sales.

The latest earnings and forecasts from most big American retailers could be summed up with a variety of negative adjectives. Its quick ratio was 0.60 while current ratio was noted as 1.30 in the most recent quarter. Investors welcomed strong earnings from Wal-Mart Stores and other retailers. Operating income was $5.24 billion versus $5.28 billion in the period a year before, with higher operating, selling and general and administrative expenses weighing in the period year over year as the company continues investment in technology and labor. Most of the sales increase came from Walmart.com, said a spokesman. Earnings per share at $1.00 was ahead of the $0.96 that analysts had waited for.

Online sales added 0.8 percentage points to the first quarter comparable sales gain. The only negative was that net revenue at $117.5 billion was a little less than the $117.8 billion that was expected.

THE QUOTE: "People may be wanting to put money to work in stocks, but the bonds they bought yesterday, they're still going to keep those as a little bit of a hedge, just in case", said JJ Kinahan, chief market strategist at TD Ameritrade.

Wal-Mart returned $3.7 billion to shareholders through dividends and share buybacks in the quarter. "The acquisitions are helping us speed some things up".

  • Zachary Reyes