Walmart, the US-based owner of Asda supermarkets, said its own net profit for the three months to the end of July rose 8.6% to $3.77bn (£2.87bn). That is stronger than market expectations for a rise of 1 percent, according to research firm Consensus Metrix.
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The retailer said it was hard to quantify the effects of low gasoline prices and unseasonably warm weather, but those factors contributed to overall sales growth. Wal-Mart has also promised to start rolling out lower prices across its stores.
Wal-Mart President and CEO Doug McMillon said the company remains focused on being a “seamless shopping experience” for consumers.
After dropping by almost 30% last year, Wal-Mart’s stock has enjoyed a sharp rebound for much of this year.
Wal-Mart Stores, Inc. (NYSE:WMT)’s mean EPS estimate was $0.97 for the quarter ended on 10/2015, while it reported EPS of $1.03 on 11/17/2015 Before Market Open, beating the analysts’ consensus estimate by 0.06 with surprise factor of 6.19%.
Shares of the world’s largest retailer rose over 4 percent.
Store visits increased 1.2 per cent.
For the third quarter, Wal-Mart expects earnings to be between 90 cents and $1 per share, compared to the consensus of 93 cents per share.
Wal-Mart Stores Inc. (WMT) closed 10.88% above its 200-day moving average and is 0.84% above another chart threshold, its 50-day moving average.
This quarter marked the eighth consecutive quarter of positive same-store sales for Wal-Mart, which saw a 1.2% rise in customer traffic.
The figures highlight the challenge facing Asda’s new CEO Sean Clarke, who took over the role last month, and is tasked with an ambitious strategy to turn the company around with a £1.5bn price investment plan over the next five years.
Walmart’s online sales rose 12% from the first quarter. “One of the things we like about the technology they have developed is that it rewards customers in real time with savings on a basket of goods and puts them more in charge of the price they pay”.
“We’re pleased with the positive momentum in our business”.
The company is also investing in its stores, including its highly publicized wage increase and training program for employees. But labor organizations are pushing for a $15-an-hour base.
Wal-Mart is fighting off competition on multiple fronts, from Amazon.com and dollar stores, to grocers like Kroger, which are ramping up promotions and lowering prices.
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Walmart boss Doug McMillon said: “In the United Kingdom the competitive environment and food deflation continued to challenge the market, significantly impacting traffic and comp (arable) sales”.
