The U.S. multinational retail corporation Walmart (WMT, Financial) reported impressive first-quarter earnings and revenues that surpassed estimates. The company got a big boost from e-commerce as U.S. online sales surged 33% in the first quarter on a year-over-year basis.
Having witnessed a strong decline in the e-commerce sector in the previous quarter, the company made considerable investments in online grocery and also towards website design, which has paid dividends to the company in the first quarter. CFO Brett Briggs commented in an interview with CNBC:
"Online grocery continued to accelerate and [we] had the new Walmart.com site redesign late in the quarter. We also have new brands in e-commerce, including the partnership with Lord & Taylor, so there are a lot of different things driving growth there."
By the numbers
The company’s earnings per share came in at $1.14 cents in the first quarter, which was 2 cents more than what was forecasted. Wal-Mart’s revenue stood at $122.69 billion, up from $120.51 estimated by analysts. For the quarter ended April 30, the company reported net income of $2.13 billion or 72 cents per share, down from $3.04 billion or $1 per share reported in the year-ago quarter.
In its home market, the company grew 2.1% year-on-year beating analysts’ expectations of 2%. Same-store sales at Sam’s Club rose 3.8% powered by comparable traffic growth of 5.6%. The company’s international performance also flourished as sales rose 11.7% in the first quarter to $30.3 billion.
Steps taken
The retail giant is also trying to strengthen its delivery to provide a fine shopping experience to customers. In March, the company provided same-day delivery service to more than 40% U.S. households.
The company has been trying to strengthen its business in the international segment through various partnerships and acquisitions. For example, Walmart recently acquired India’s major online retail platform Flipkart. The company estimates that this acquisition, however, would reduce its full-year fiscal 2019 earnings per share in the range of 25 and 30 cents.
In addition, the company has joined hands with Lord & Taylor to create a dedicated space on its site to sell Lord & Taylor’s clothing in the coming few weeks. The company remains optimistic regarding its improvement in the digital numbers, considering the investment Walmart has made in the digital arena.
Disclosure: I do not hold any position in the stock mentioned in this article.
