The U.S. multinational retail corporation Walmart Inc. came out with it second quarter financial results that topped earnings and sales estimates on Aug. 16. The company attributed strong quarterly earnings to more number of customers visiting the store, hike in the average spending of customers per trip and a rise in e-commerce sales as compared to the previous quarter.
Key metrics
The company’s earnings per share per quarter came in at $1.29, which was 7 cents more than what was estimated by Thomson Reuters. Walmart’s revenue during the same period stood at $128.03 billion, up 3.8% on a year over year basis.
The company posted US comps growth of 4.5%, which was strongest in a decade led by sensational performances in grocery, apparel and seasonal goods.
The company witnessed online sales growth of 40% during the quarter. The effort that the company has devoted in revamping its website, expanding its grocery deliveries and experimenting with robots has certainly paid off.
In contrast, the company posted a decline in the operating income by 3.7% that reflects investments in digital infrastructure and store fixation and rise in the labor and transportation costs.
Efforts
As of now, the company is fully focused on improving its online arena to compete against the likes of Amazon. Of late, the company purchased Flipkart, which is India’s biggest e-commerce company. As a matter of fact, Walmart has also partnered Lord and Taylor where the latter would bring in new products in the former’s website. Additionally, the company is also putting in money to provide more delivery options to the customers. All these could bring about a fall in the company bottom line but things would stabilize in future. The company’s CEO, Doug Mcmillon, commented in a statement:
"We're pleased with how customers are responding to the way we're leveraging stores and e-commerce to make shopping faster and more convenient," He added: "Customers tell us that they feel better about the current health of the U.S. economy as well as their personal finances. They're more confident about their employment opportunities."
Outlook
The company projects full-year net sales to grow by 2%. As a matter of fact, the company anticipates earnings per share for fiscal 2018 to be around $4.90 to $5.05. Further, the company sees US comps growth of 3% for the full year. Walmart also projects its US online sales to soar 40% for the whole year. It’s time to wait and watch whether these estimates match the actual results.
Disclosure: I do not hold any position in the stock mentioned in this article.
