Wal-Mart Stores (WMT) on Thursday reported that Q2 earnings per share dropped for the sixth straight quarter, but they topped Wall Street estimates as US same-store sales climbed 1.6%, their eighth straight advance.
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Store visits increased 1.2 percent in the second quarter.
“Our strategy in the U.S.is working”, said CEO Doug McMillon.
Walmart stock was up more than 3% in early trading Thursday.
Under the leadership of McMillon, Wal-Mart is taking aggressive steps to change its reputation as a retailer that’s focused only on price. Workers are more enthusiastic – and the pool of applicants for new jobs is strong, in part because of the higher wages.
The retailer had forecast 95 cents to $1.08. The two can’t be that easily compared-Wal-Mart is vastly bigger, the demographics of their customer bases don’t exactly align, and Wal-Mart is a major US grocer while Target’s grocery business is nearly an after-thought. That subscription service, meant to compete with Amazon Prime, offers free two-day shipping for $49 a year.
As part of that deal, Walmart will get a 5% stake in JD.com and also open up an online store for its Sam’s Club warehouse brand on JD.com.
Online sales growth accelerated sequentially for the first time in five quarters, rising 11.8 percent from 7 percent in the first quarter.
The company said its profits were able to rise despite a more than 8% increase in operating costs from a year ago – mainly due to the wage increases and increased spending on e-commerce.
Shares of Wal-Mart jumped 3.5 percent to $75.50 in pre-market trade.
See additional information at the end of this release regarding non-GAAP financial measures.
Excluding a non-cash gain from the sale of Wal-Mart’s e-commerce business in China and other items, earnings per share came to US$1.07 in the second quarter ended on July 31. Net income was $3.77 billion, or $1.21 per share, up from $3.48 billion, or $1.08 per share for the same period previous year.
“We remain focused on building e-commerce capabilities globally and executing our omni-channel plan, as evidence by our recent alliance with JD.com in China and agreement to acquire Jet.com in the USA”, said Walmart CEO Doug McMillon in the earnings statement.
Revenue: WMT posted revenues of $120.9 billion. Wal-Mart Stores has a 1-year low of $56.30 and a 1-year high of $74.80.
Stage Stores Inc. (NYSE:SSI) reported that, comparable sales decreased 9.8%. Customer traffic rose 1.2 percent, marking the seventh straight quarter of gains. The U.S. Wal-Mart division accounts for 62 percent of total sales.
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The grocery business showed improvement from the first quarter despite inflationary pressure.
