Wal-Mart (WMT) Stock Gains on 1Q Earnings, Revenue Beat
Shares of Wal-Mart Stores Inc. were trading up +4.85 or +7.68 percent to $68.00 per share in Thursday’s premarket after the company beat earnings expectations for the company’s first quarter of its fiscal 2017 year. Wal-Mart Stores stock closed at $63.15, down -1.95 or -3.00 percent in Wednesday’s regular trading session.
Bentonville, Arkansas based Wal-Mart Stores Inc. also known as Walmart, was founded by Sam Walton in 1962 and incorporated in 1969.
For the company’s first fiscal quarter of 2017 ended on April 30th, Wal-Mart reported earnings of $0.98 per share compared to $1.03 per share in the same period one year ago. First quarter revenue came to $115.9 billion versus $114.83 billion in 2016’s first quarter, on a constant currency basis, revenue was $119.4 billion, a 4 percent increase over last year’s first quarter. Analysts expected the company to report earnings of $0.88 per share on revenue of $113.2 billion.
In an interview with CNBC, Wal-Mart Chief Financial Officer Brett Biggs said that “Several things (are) working for the consumer: fuel prices, unemployment and interest rates still low. But there is an air of uncertainty that is likely keeping the consumer from being as bullish as they would like to be,” Adding that, “E-commerce growth of 7 percent in constant currency isn't the growth rate we would like in that side of the business, but we continue to make foundational progress.”
Walmart U.S reported comparable store sales were up +1.0 percent in the quarter, its seventh consecutive increase. Neighborhood comparable sales were up +7.1 percent, both driven by a +1.5 percent increase in positive traffic. Net sales for the quarter came to $28.1 billion, on a constant currency basis, net sales were $31.6 billion, up +4.3 percent over last year’s first quarter, while operating income rose +22 percent.
Wal-Mart has been taking steps to compete with Amazon.com's (AMZN) two day delivery. The company announced last week it was reducing its free shipping pilot program delivery time from 3 days to 2 days and reducing the membership price by $1 to $49 per year. Amazon charges $99 per year, but comes with a variety of extra perks.
Wal-Mart has outperformed most other retailers in the first quarter and the difference is being reflected in its stock price. This morning’s premarket action shows renewed confidence in the stock, which has declined over 17 percent in the last twelve months, but is up 3 percent so far this year.
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