Walmart (WMT) has just released its earnings report just before opening bell of stock market yesterday. Walmart has posting 98 cents earnings per share on $115.9 billion in sales. However, analysts were expecting 88 cents earnings per share on 113.21 billion on revenue. Last year in the same quarter company had reported $1.03 earnings per share on 114.83 billion on sales.
Sales of the big size retailer in U.S. have increased by 1 percent over 0.5 percent expected which is good news for the company. The same store which clocked the higher sales of 1 percent in previous six corresponding period has followed in seventh consecutive quarter as well.
Company’s Sam’s club store sales were up 0.1 percent excluding fuel sales and down 1.9 percent including fuel sales. Neighborhood store sales of Walmart also rose significantly to 7.1 percent in the quarter whereas company’s overall U.S. sales increased by 4.3% for the quarter.
Walmart store president and chief executive officer Doug McMillon replied to correspondent, “ We are pleased with the results versus guidance.’’ Company’s profit rose U.S. and outside U.S. as well. Membership trends in Sam’s club and EPS results were good enough to cheer up.
E-Commerce sales were also grown by 7% and in addition to that gross merchandise sales rose to 7.5% during the quarter. International sales grew to 4.3% resulting in $31.6 billion. Company’s overall sales grew to $73.3 billion.
Walmart is off to a good start this year and company is committed towards building more capabilities for E-commerce, for providing endless customer shopping experience and driving growth and profit for the company. Improved inventory is another contributor towards increased cash flows in the corresponding quarter.
Company’s operating income fell to 7.1% due to planned investments in people and technology as well as currency fluctuations, without currency fluctuations Company’s operating profit fell to 4.3%
Company projected that its investments in higher wages and training would cost about $0.30 per share over the full year and biggest impact in the coming first quarter, so the result was probably backed by the analysts.
Estimated earnings per share for the second quarter are $0.98 and revenues of $119.26 billion of Walmart stores. Analysts are expecting earnings per share of $4.14 and sales figures of $482.23 billion. Walmart’s purchase was $2.74 billion in its common stock which is about 41 million shares. Company has also kept $14.7 billion in its $20 billion program for authorized buy back.
Stock market reacted positively on company’s news and Walmart’s shares traded up nearly 9% before opening of Thursday’s market at $68.80. Walmart’s shares traded in range of $56.30-$76.42 during last 52 weeks.
Analysts target was set at $65 before announcement of the quarterly results and high target at $80. Whereas shares are already trading high at $69.87 as per latest stock market news report.
Nomura has increased price target of Walmart stores at $81 from $70 and also maintains buy rating for the stock. The Street Ratings rated Walmart as a “Buy” with B+ ratings.