Markets

Discount Retailers Whip Out Surprise Earnings (TGT, WMT)

Discount Retailers Whip Out Surprise Earnings (TGT, WMT)

Wal-Mart said sales at USA stores open at least a year rose 1.4 percent, excluding fuel price fluctuations.

The world's biggest retailer is accelerating efforts to "combine our digital and physical assets to make our shipping simple and easy for customers", chief executive Doug McMillon said in a statement. "Our plan is gaining traction ..."

The quarterly results proved to be a rare bright spot in a quarter that many other retailers that are also brick and mortar struggled in their attempts to attract shoppers. Department stores J.C. Penney, Macy's and Dillard's reported disappointing results earlier this month.

Walmart has recognized that it must become a bigger player online and on people's phones if it is going to be able to compete effectively against e-commerce king Amazon.

US first-quarter same-store sales rose 1.4% at the company's supercenter and discount stores.

Cowen & Co's senior research analyst Oliver Chen said "Wal-Mart's commitment to value pricing is driving traffic and growth in grocery and aggressive online strides are impacting comparable sales". Excluding currency2, total revenue was $118.8 billion, an increase of 2.5%.

Walmart was more cause than victim of first-quarter retail woes: Rising gas prices, late tax refunds, the peregrinations of the Easter Bunny - none of that hurt Walmart like it did others.

The largest retailer in the US - which has substantially ramped up its digital heavily in recent months - released first-quarter results today that showed significant e-commerce gains as well as modest year-over-year improvements in overall sales. Officials said the website now offers 50 million products for purchase, up from 10 million a year ago.




As of Wednesday's close, shares of Wal-Mart have climbed almost 19 percent over the past 12 months and are up about 9 percent for the year-to-date period. After buying that business in September, he put co-founder Marc Lore in charge of USA e-commerce. With Jet.com founder Marc Lore installed as head of Walmart.com, it bought ShoeBuy.com, outdoor gear seller Moosejaw and trendy clothing seller ModCloth.

He still sees plenty of room for improvement despite the first-quarter progress.

Online sales rose 63 percent in the first quarter, which was higher than 29 percent growth in the fourth quarter.

WMT's momentum continued, as the company reported another quarter of relatively solid top-line performance while delivering its first increase in US earnings in over three years. The division was led by results from China and Mexico.

Shares of Wal-Mart rose 0.8 per cent in pre-market trading to $75.70.

The Arkansas-based home of the yellow smiley face reported profits that topped forecasts and an increase in same-store sales (which measures how well stores open at least a year are doing) that was also better than expected.

In this Wednesday, Feb. 8, 2017, photo, customers head to the parking lot after shopping at a Wal-Mart, in Hialeah, Fla.

"We feel good about the momentum across the business and we expect progress to continue", Chief Financial Officer Brett Biggs said.


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