Wal-Mart's online sales surge, tops 1Q expectations

Walmart Ecommerce Sales

Walmart showed its muscle in the first quarter, reporting a big jump in online sales, an increase in traffic at its us stores, and earnings that beat the Street.

Lore, who joined the company as part of last year's $3.3 billion acquisition of Jet.com, said the retailer's move to free two-day shipping without a membership fee and an increase in repeat orders played a big role in the 63 percent sales surge.

The results reflected Wal-Mart's efforts to lure customers to U.S. stores through upgrades to infrastructure, better customer service after boosting worker pay, and enhanced e-commerce offerings.

In a conference call, Doug McMillon, Wal-Mart Stores president and CEO, asserted that the company's online and related initiatives are starting to have an impact on overall performance.

Shares of Wal-Mart stock were up more than 2 percent in midday trading Thursday. Investors welcomed strong earnings from Wal-Mart Stores and other retailers. The plan, said McMillon was gaining traction. Comp-store inventory also fell 7.3% despite the 1.4% sales increase, an 8.7-point spread almost as big as the prior quarter's 9.

The earnings results gave only hints of about how much the bump in sales is from the acquisitions of the previous year, compared with the other changes the company has made.

Wal-Mart ( WMT ) reported mixed fiscal first quarter results on Thursday, as its bottom line beat analyst expectations but revenue missed.

For the second quarter, Wal-Mart said it expected an increase of 1.5 percent to 2 percent in USA same-store sales. The company has also invested $2.7 billion in higher wages and training for workers to decrease turnover and make the shopping experience more appealing.

A big piece of that e-commerce growth stems from the company's most recent strategy.

Wal-Mart had reported that majority of its internet sales growth came from existing online operations.

Wal-Mart said it now offers 50 million items through its website, up from 35 million in the last quarter and 10 million from the same time a year ago. Since he joined the company, the number of items available on its third-party online marketplace has soared to more than 50 million. Important initiatives underway in the USA are accelerating significant growth in ecommerce, generating continued positive comp-store sales and driving traffic to our stores.

Shares of Wal-Mart were last seen up 1.6% at $78.75 on Friday, with a consensus analyst price target of $77.49 and a 52-week trading range of $65.28 to $78.90. The retailer's consolidated net income declined marginally to $3 billion in the first quarter. (WMT) reported Thursday lower net profit in its first quarter with weak worldwide segment results. Diluted earnings per share topped a MarketBeat analyst average estimate of 96 cents, although observers looked for revenues to be a bit higher. Eight analysts surveyed by Zacks expected $117.63 billion. It has asked vendors to offer grocery prices that are 15 percent lower than competitors.

The growth was driven by a 1.5% increase in customer traffic, the company said. It forecast earnings per share of US$1 to US$1.08, against market expectations of US$1.07.



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