Wal-Mart Stores Inc. shares rose 3.5% in Thursday premarket trading after the retail giant reported second-quarter earnings that exceeded estimates. That compares with $3.47 billion, or $1.08 per share in the year-ago quarter. Adjusted earnings were $1.07, beating the $1.02 per share FactSet consensus.
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The retailer said it “remains committed” to its previously announced five-year price investment of £1.5 billion, while United Kingdom management is focusing on retail basics through “Project Renewal”. In the aggregate, we forecast Wal-Mart to generate 3%-4% sales growth outside the USA over our 10-year explicit forecast.
Shares of the world’s largest retailer rose over 4 percent.
Despite Asda’s woes in the UK, Walmart said like-for-like sales at its U.S. stores rose a better-than-expected 1.6%, excluding fuel.
Walmart has made an expensive $3.3bn bet that it can play catch-up in the U.S. through acquiring online marketplace Jet.com and bringing its co-founder Marc Lore on board to run Walmart’s ecommerce business.
Of Britain’s big four supermarkets, which also includes market leader Tesco, Sainsbury’s and Morrisons, Asda has been the laggard in sales terms for two years, losing customer traffic and food volume in its large format stores.
According to RBC Capital Marketss price target of 76 on the company’s stock this indicates the broker now believes there is an increase of 2.29% from Wal-Mart Stores Inc’s current price of 74.3.
Neighborhood Market comps also increased approximately 6.5%, with strong customer growth.
Net sales grew 0.1 percent from previous year to $119.41 billion, while membership and other income climbed 61.2 percent to $1.45 billion. Analysts on average were expecting $1.02, according to Thomson Reuters I/B/E/S.
Wal-Mart U.S. Chief Executive Officer Greg Foran said on a conference call that the company’s customers were still cautious with their spending but were visiting stores more often and buying more items.
The largest United States retailer was exposed to currency headwinds throughout the quarter due to fluctuations in exchange rates, which weighed down the company’s global sales. Worldwide sales fell 6.6 per cent to $28.6-billion but increased 2.2 per cent on a currency-neutral basis. While revenues increased on a year-over-year basis owing to an improvement in comps, earnings witnessed a decline.
Shares in Tesco were up 2 percent, Sainsbury’s up 2.8 percent and Morrisons up 2.5 percent.
This summer, the company completed the rollout of Walmart Pay, a feature that allows shoppers to pay at the register using their smartphone.
In the midst of a rapidly changing retail landscape, the retailer has been making aggressive moves to bolster its online business and super centers.
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The company expects full-year effective tax rate at the low end of the previously stated range of 31.5% to 33.5%.
