Walmart Inc.'s efforts to improve customers' shopping experience helped boost U.S. same-store sales by 4.5 percent in the second quarter, the company reported Thursday.
Revenue rose 3.8 percent, to $128 billion, over the same period last year. The Bentonville-based retailer reported earnings per share of $1.29 after adjusting for factors including the sale of its majority stake in Walmart Brazil and its investment in Chinese firm JD.com. In comparison, Walmart reported adjusted per-share earnings last year of $1.08.
Although Walmart posted a net loss of $861 million, or 29 cents per share, for the quarter that ended July 27, Chief Financial Officer Brett Biggs said in a news release that a change this year in U.S. accounting principles requires the company to include unrealized gains and losses of certain equity investments in calculating its net income. The second-quarter results reflect the Walmart Brazil and JD.com transactions.
Wall Street reacted to Thursday's report with enthusiasm, as Walmart shares quickly climbed about 10 percent in early morning trading. Shares closed Thursday at $98.64, up $8.42, or 9.33 percent, on the New York Stock Exchange. Shares have traded between $77.50 and $109.98 in the past year.
Brian Yarbrough, a retail analyst with Edward Jones, said investors most likely were excited over the U.S. same-store sales figures, a 40 percent growth in e-commerce sales, and Walmart raising its guidance for the fiscal year to adjusted earnings per share of $4.90 to $5.05.
E-commerce sales grew only 30 percent in the previous quarter, so the second-quarter results represented a bit of a comeback, Yarbrough pointed out. However, Jennifer Bartashus, a senior analyst at Bloomberg Intelligence, said Walmart's stores remain the core of its business.
"It's easy to get caught up in the online story," she said. But improvements such as increased inventory and cleaner stores shouldn't be underestimated. "Customers are having a better experience in the stores and online," she said.
Walmart Chief Executive Officer Doug McMillon said in a news release that the strong results show "customers are responding to the way we're leveraging stores and e-commerce to make shopping faster and more convenient."
"We're continuing to aggressively roll out grocery pickup and delivery in the U.S., and we recently announced expanded omnichannel initiatives in China and Mexico," he added.
Walmart's U.S. division, the company's largest, reported net sales of $82.8 billion, up 5.2 percent from last year's second quarter. At stores open at least a year, considered a key indicator of a retailer's health, grocery sales were the strongest in nine years. The company attributed the increase largely to its pricing strategy and additions to its private-label brands.
Net sales for Walmart International grew 4 percent, to $29.45 billion. Its four largest international markets -- Mexico, the U.K., Canada and China -- all posted positive same-store sales growth. Walmart de Mexico, which includes the results of its stores in Central America, led with a 5.4 percent increase in same-store sales and a 7.3 percent increase in net sales.
At Sam's Club, Walmart's warehouse club division, net sales slipped 0.6 percent to $14.79 billion. Same-store sales, excluding fuel, grew 5 percent.
Sam's Club is "at the early stages of really turning around the business, so the results are going to remain a little volatile in the short term," Bartashus said, and the division's strategy includes focusing on the right consumer demographic for its business.
Walmart returned $2.8 billion to shareholders during the quarter through dividends and share repurchases.
A Section on 08/17/2018