Greg Foran, CEO of Walmart U.S., attributed Wal-Mart’s relative strength to improved grocery options, tidier stores, better customer service and discounts. Granted, any upward revision to guidance is positive, the company’s guidance “doesn’t look as notable” when comparing to last year’s earnings per share of $4.57.
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Wal-Mart’s same store sales surged almost 1.6%, whereas its neighborhood comps jumped roughly by 6.5%, compared to the same quarter past year.
Revenue at U.S. Wal-Mart stores opened at least a year rose 1.6 percent, its best performance since 2008.
Operating income rose 1.6% year over year in the second quarter, including the gain on the sale of Yihaodian. Traffic in stores was up 1.2%, just below the 1.3% gain in the second quarter of 2015.
Walmart’s chief financial officer Brett Biggs said: “In the United Kingdom, fierce competition and food deflation continue to challenge the market, significantly impacting traffic and comp sales trends”. Earlier this month, Wal-Mart said it would spend $3 billion to acquire fast-growing online retailer Jet.com.
Wal-Mart shares have risen 19% so far in 2016, and 1% over the past twelve months, compared to a 6.7% year-to-date rise in the Standard & Poor’s 500 index.
In the midst of a rapidly changing retail landscape, the retailer has been making aggressive moves to bolster its online business and super centers. The company also enjoyed a 1.6% rise in US same-store sales, which measures the performance of stores open for at least one year.
The retailer had forecast 95 cents to US$1.08. The U.S. Wal-Mart division accounts for 62 percent of total sales.
“We continue to see proof that our customers enjoy a seamless shopping experience”, McMillon said.
Revenue edged up 0.5% to $120.85 billion.
E-commerce sales rose 11.8 percent in the quarter.
Mr Clarke, who has also held top roles with Walmart in Japan and Canada, will find himself up against a resurgent Tesco and Morrisons, which are both undergoing their own turnarounds. Wal-Mart says that will allow it to grab higher-income and younger customers.
With its long history of returning significant cash to investors, Wal-Mart Stores Inc (NYSE:WMT) is always considered as a stock for defensive investors and retirees’ portfolio. But same-store sales were positive in nine of Wal-Mart’s 11 global markets.
Wal-Mart is also trying to make its produce, meat and grocery business more prominent for shoppers, an effort at the heart of its plan to fend off Amazon as consumers still tend to shop offline for fresh food.
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The company raised its fiscal-year earnings outlook to between $4.15 and $4.35 a share, including an estimated hit of 5 cents from the Jet.com acquisition, from a previous range of $4.00 to $4.30.
