Shares of Wal-Mart were trading at $68.15 before the market opened, up from Wednesday’s close of $63.15.
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Comparable store sales – at Walmarts in the United States open for at least one year – rose 1%. That marked the seventh straight quarterly rise and was stronger than market expectations for an increase of 0.5 percent, according to research firm Consensus Metrix.
President and CEO Doug McMillon said: “We are pleased to see the USA comp result, strong performance outside the U.S., membership trends in Sam’s Club, and EPS results versus guidance”. Second quarter EPS is expected to be between $0.95 and $1.08. “We’re off to a good start for the year”. On Wednesday, Target Corp. reported that consumers pulled back on spending, with its chief executive citing “an increasingly volatile consumer environment”.
Wal-Mart gets more than half its revenue from grocery products, which analysts have said could shield it from some of the pressures on brick-and-mortar retailers, as food shopping has been slower to shift online.
Company officials touted stronger sales at namesake USA stores, by far the biggest division in terms of company revenues.
“There are not a lot of holes to pick”, in today’s numbers, says Brian Yarbrough, retail analyst at Edward Jones”. Sales were particularly strong in Canada and Mexico, Biggs said.
Wal-Mart is making lots of changes that it says keep it competitive in a changing retail landscape. But the moves haven’t been enough to counter weak demand for some, particularly apparel retailers and department stores including Macy’s. But that was balanced out a bit by stronger traffic to stores.
E-commerce sales grew 7%, while gross merchandise volume climbed 7.5% during the quarter. Wal-Mart had forecast earnings of 80 cents to 95 cents a share. On a constant currency basis, total revenue rose 4% to $119.4 billion, the retailer said.
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Excluding one-time charges and benefits, per-share earnings were 98 cents, a dime better than Wall Street had expected.
