What’s particularly refreshing is that one of the retailer’s strongest performers has been its Aerie lingerie line.
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Investors are reacting strongly to the report, in pre-market trading shares of Walmart are rising 7.68% to $68 per share. This is the largest single day gain for Walmart stock since October 2008, as per FactSet.
The retailing giant posted diluted earnings per share (EPS) of $0.98 on total revenues of $115.9 billion, which includes membership fees in Sam’s Club. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.88 and $113.22 billion in revenue. The company had forecast earnings per share of between 80 cents and 95 cents and analysts had anticipated 88 cents a share. The street now has 3 strong buys, 1 buy, 22 hold, 2 underperform and 1 sell rstings on Wall-Mart.
Walmart has posted an operating cash flow of $6.2 billion and free cash flow of $4.0 billion, both higher than a year ago.
Wal-Mart’s results stand out from a list of retailers with disappointing starts to the year. Sales at US stores open at least a year rose 1 percent, double Wall Street’s estimates. This marks the seventh straight quarter the company has delivered positive comps.
“We are pleased to see the USA comp result, strong performance outside the USA, membership trends in Sam’s Club and EPS results versus guidance”, said Wal-Mart President and Chief Executive Officer Doug McMillon in a statement. The Company’s operations are conducted in three segments: Walmart U.S., Walmart International and Sam’s Club. Excluding currency fluctuations, worldwide sales amounted to $31.6 billion, while Wal-Mart sales grew to $73.3 billion. Same-store sales at the Neighborhood Market stores rose approximately 7.1% in the quarter, and total U.S.net sales rose 4.3% for the quarter. WMT saw growth in nearly all key areas of business and managed to topple the consensus estimates for both revenue and EPS comfortably. The rise in sales was driven by the sixth consecutive quarter of positive traffic, which increased 1.5% this time.
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Big-box behemoth Walmart released a surprisingly upbeat earnings report on Thursday, showing it has been able to keep its turnaround efforts on track despite a shopping environment that has proved punishing to many major retailers. However, the actual number that was reported came in at $0.98 per share, beating expectations by more than 10%! Conventional wisdom suggests that after such a massive one day surge, the stock is “more than likely” to take a breather, which should then provide traders with a favorable risk-reward entry.
