Wal-Mart Tops 1Q Profit Forecasts, Online Sales Up 63 Percent

by Lance Turner  on Thursday, May. 18, 2017 6:55 am   2 min read

(Wal-Mart Stores Inc.)

Wal-Mart Stores Inc. of Bentonville on Thursday reported first-quarter earnings that beat analyst expectations, and online sales rose 63 percent on what the retailer called "organic" growth at its website.

Shares of Wal-Mart (NYSE: WMT) rose 3 percent on the news, trading at around $77. CEO Doug McMillon said executives were encouraged by the start of the year, and said plans to combine on- and off-line retail were "gaining traction."

"We delivered a solid first quarter and we're encouraged by the start of the year," CEO Doug McMillon said. "We're moving faster to combine our digital and physical assets to make shopping simple and easy for customers. Our plan is graining traction, and I want to thank our associates for their hard work, ingenuity and commitment to our customers.

"Our customers have choices, and we have to earn their business with every interaction."

In an earnings release, Wal-Mart reported first-quarter net income of $3.04 billion, or $1 per diluted share, compared with income of $3.08 billion, or 98 cents, in the same quarter last year. Revenue was $117.54 billion, up 1.4 percent from the same quarter last year, missing analysts' estimates.

But earnings beat Wall Street expectations; the average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 96 cents per share, according to The Associated Press.

Investors have been closely watching Wal-Mart's U.S. e-commerce sales, which rose 63 percent during the quarter, an increase over the 29 percent jump it reported in the fourth quarter. Wal-Mart pointedly noted that the growth was "organic" — not attributable to recent e-commerce acquisitions.

Meanwhile, U.S. same-store sales rose by 1.4 percent, driven by a 1.5 percent increase in in-store traffic.

In all, Wal-Mart's U.S. stores raked in revenue of $75.4 billion, up 3 percent from the same quarter last year, and reported operating income of $4.3 billion, up 0.9 percent from the same quarter last year.

Wal-Mart International posted revenue of $27.1 billion, down 3.5 percent from last year, and operating income was $1.2 billion, down 0.1 percent.

Wal-Mart's warehouse retailer, Sam's Club, reported revenue of $13.9 billion, up 2.8 percent, and operating income was $414 million, up 0.2 percent. 

Looking ahead, Wal-Mart expects per-share earnings to range from $1 to $1.08 for the current quarter. Analysts expect adjusted earnings per share of $1.07.



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