Walmart Inc (NYSE: WMT) came through with the online sales growth it had promised in the first quarter, and the stock traded higher on Thursday morning on the strength of solid first-quarter numbers across the board for the retail giant. Analysts say Walmart remains well-positioned to capitalize on a cyclical boom in discount retail in the next several years.
Walmart reported first-quarter earnings per share of $1.14 on revenue of $122.69 billion. Both numbers topped consensus estimates of $1.12 in EPS and $120.51 in revenue. Revenue was up 4.4 percent from a year ago. Same-store sales grew 2.1 percent, ahead of Wall Street expectations of 2 percent. WMT stock was up nearly 2 percent in pre-market trading on Thursday.
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After falling from 50 percent in the third quarter to 23 percent in the fourth quarter, online sales growth bounced back to 33 percent in the first quarter, reassuring concerned investors.
Sam’s Club performance was particularly strong in the first quarter. Walmart reported Sam’s Club same-store sales growth of 3.8 percent and comparable traffic growth of 5.6 percent.
International sales were up 11.7 percent to $30.3 billion. Walmart has been aggressively pursuing high-growth international regions such as India and China via partnerships and acquisitions. Earlier this month, Walmart announced it is taking a $16 billion majority ownership in Indian e-commerce leader Flipkart.
“We delivered a solid first quarter, and we’re encouraged by the continued momentum across the business,” CEO Doug McMillon says in a statement. “We are changing from within to be faster and more digital, while shaping our portfolio of businesses for the future.”
Looking ahead, Walmart says it expects the Flipkart acquisition to reduce its full-year fiscal 2019 EPS by between 25 and 30 cents. Walmart typically updates its full-year guidance in its second-quarter report, but the company previously guided for full-year EPS of between $4.75 and $5, online sales growth of 40 percent and same-store sales growth of at least 2 percent.
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CFRA analyst Joseph Agnese says Walmart’s heavy investments in its business will pay off for investors in the long term. “We see WMT gaining market share due to an improving in-store experience, expanded product offerings, faster delivery, expanded in-store pick-up locations and its low price offerings,” Agnese says.
CFRA has a “buy” rating and $109 price target for WMT stock.
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Strong Walmart Inc (WMT) Earnings Reassure Investors originally appeared on usnews.com
