Wal-Mart Hits 52-Week High on Solid Sales, Outlook

Wal-Mart Stores Inc. (NYSE: WMT) reported its financial results for the second quarter of fiscal year 2017 on Wednesday. The retail giant posted robust quarterly earnings, as the top-line and bottom-line managed to beat the analysts’ estimates.

As the report was released, the stock of Wal-Mart surged and hit 52-week highs. As of 4:00 AM GMT -4 on August 19, WMT shares are trading at $74.30, up by 1.88 percent or 1.37 points. So far, the trading activity has also been strong, as the company’s stock has already traded 7.88 million times. This figure is 1.13x the average daily trading volume.

Wal-Mart’s revenue edged higher by 0.5 percent on a year-over-year basis to hit $120.9 billion, beating analysts’  by 0.6 percent, and expanded 2.8 percent on a year-over-year basis, exclusive of the negative currency translation. In terms of the company’s earnings per share for the quarter, it managed to surpass the consensus estimate by 4.9 percent by reporting an EPS of $1.07.

In addition, Wal-Mart US posted comparable-store sales growth for 8 consecutive quarters, with the figure hitting 1.6 percent on a year-over-year basis. The major catalyst for this growth is the seven straight quarters of robust traffic, which surged by 1.2 percent year-over-year. Neighborhood Market comparable store sales climbed by 6.5 percent on a year-over-year basis.

When it comes to Walmart International’s net sales, it amounted to $28.6 billion, and went up by 2.2 percent on a year-over-year basis on constant-currency. Meanwhile, gross merchandise value (GMV) and e-commerce sales grew by 13 percent and  11.8 percent year-over-year internationally. On the other hand, consolidated operating income tumbled by 7.2 percent year-over-year because of currency headwinds and investments in technology and human resource.

The Wal-Mart CEO and President Mr. Doug McMillon stated,  “We’re pleased with the positive momentum in our business. Our strategy in the US is working, as we delivered an eight consecutive quarter of positive comps, and international also performed well.”

The retail corporation continues to turn its focus on bolstering its e-commerce capabilities all over the world, and implement its omni-channel plan. This was reflected in Wal-Mart’s recent partnership with JD.com in China, and the company’s decision to purchase Jet.com in the United States.

Furthermore, the retail giant also updated its guidance for fiscal year 2017, and now estimates earnings per share to clock in within the $4.15 to $4.35 range, including an estimated dilutive impact of $0.05 in the last quarter of this year. This can be considered as a result of expected operating losses and one-time expenses associated with the deal to acquire Jet.com.

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