Wal-Mart Posts Surprise Revenue Increase, Gives Upbeat Outlook
19 Maggio 2016 - 2:00PM
Dow Jones News
Wal-Mart Stores Inc. on Thursday posted surprise revenue growth
in the first quarter and offered an upbeat view on the current
period, underscoring that the company's robust grocery business
could help shield it from a difficult retail environment.
Shares of Wal-Mart jumped 8.2% to $68.32 in premarket trading
and have risen 3% this year as of Wednesday's close.
The Bentonville, Ark., company has been spending heavily to get
customers back into its stores. It has worked to better stock
stores, improve efficiency and increase pay for its employees. But
Wal-Mart has warned that those efforts would dent profits this
fiscal year. Indeed, profit slipped 7.8% in the first quarter, but
it still topped the company's expectations.
Wal-Mart's results stand out from a list of retailers with
disappointing starts to the year. On Wednesday, Target Corp.
reported that consumers pulled back on spending, with its chief
executive citing "an increasingly volatile consumer environment."
Soft results from department stores like Macy's Inc. and Nordstrom
Inc. illustrated shoppers' shift away from brick-and-mortar stores
and sparked declines across the retail sector.
Wal-Mart gets more than half its revenue from grocery products,
which some analysts have said could shield it from some of the
pressures on brick-and-mortar retailers, as food shopping has been
slower to shift online.
Retailers have been closing weaker locations and investing in
e-commerce as consumers shift online shopping and fast-fashion
chains. But the moves haven't been enough to counter weak
demand.
Still, off-price chain TJX Cos. and home-improvement stores like
Home Depot Inc. this reported healthy traffic and spending at their
locations, suggesting that consumers are willing to spend but are
being more selective about where.
In the first quarter, sales at Wal-Mart's existing U.S. stores
ticked up 1%, marking the seventh straight quarterly gain after a
long stretch of declines. Analysts polled by Consensus Metrix
expected 0.5% growth in the metric.
The number of people visiting Wal-Mart's stores rose 1.5%.
Over all, Wal-Mart posted a first-quarter profit of $3.08
billion, or 98 cents a share, down from $3.34 billion, or $1.03 a
share, a year earlier. Wal-Mart had forecast earnings of 80 cents
to 95 cents a share. Analysts anticipated 88 cents.
Revenue rose 0.9% to $115.9 billion, above the $113.2 billion
analysts polled by Thomson Reuters had forecast. Excluding currency
impacts, revenue rose 4%.
For the second-quarter, company said it expects earnings between
95 cents and $1.08 a share. Analysts were expecting second-quarter
profit of 98 cents.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 19, 2016 07:45 ET (11:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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