Walmart 1Q Beats Earnings Expectations As Same-Store Sales Rise 3.4%

Walmart 1Q Beats Earnings Expectations As Same-Store Sales Rise 3.4%
(Walmart Inc.)

BENTONVILLE - Walmart Inc. of Bentonville delivered a mixed bag in the first quarter, beating Wall Street expectations on profit, but revenue fell short.

The nation's largest retailer posted another quarter of same-stores sales growth Thursday, while e-commerce sales soared.

There are challenges ahead, however, as Walmart trades jabs with Amazon in a fight to see who can get packages to customers faster.

Walmart launched next day delivery on its most popular items this week in Phoenix, Arizona, and Las Vegas. It plans to roll out next day delivery to most of the country by year end, covering 220,000 popular items from diapers to toys, with a minimum order of $35.

The announcement was made two weeks after Amazon said would be upgrading its free shipping for members from the standard two day delivery, to one day.

Walmart and other retailers are facing more hurdles as a trade war with China escalates. The Trump administration last week slapped tariffs of 25% on imports like furniture and wants to extend the 25% tariffs to practically all Chinese imports not already hit with levies.

More: Walmart says China tariffs will mean higher prices for customers.

The company said that U.S. sales at stores opened at least a year rose 3.4%. The number of transactions in its stores and clubs as well as its e-commerce business rose 1.1%.

U.S. e-commerce business rose 37%. The report Thursday provided more evidence that Walmart's efforts to expand online grocery services, including curbside pickup and home delivery, has helped it keep up its arms race with Amazon.

The company has about 2,450 stores that offer free grocery pickup for customers who shop online. It also has nearly 1,000 stores that offer same day grocery delivery.

Walmart's Sam's Clubs posted a 0.3% increase in same-store sales.

Walmart is also testing new innovative ways to cut costs and make workers more efficiently. It officially opened a lab in a Neighborhood Store in Levittown, New York, that has thousands of cameras that mind the store and help keep track of items that need to be replenished. It's hoping to scale some of the technology to other stores.

The company reported first quarter net income of $3.84 billion, or $1.33. Earnings, adjusted for non-recurring gains, came to $1.13 per share. That beat per-share earnings projections by 11 cents, according to a survey of industry analysts by Zacks Investment Research.

The world's largest retailer had revenue of $123.93 billion, missing forecasts for $125.33 billion.

Walmart stuck to its outlook for the year. Shrares rose 2 percent before the opening bell Thursday.

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