Wal-Mart Q2 Profit Down, Adj. EPS Tops Estimates On Higher Comps

Wal-Mart Stores Inc. (WMT), the world’s largest retailer, reported Thursday a decline in second-quarter profit with a significant charge. Adjusted earnings topped analysts’ estimates with higher comparable sales. Looking ahead, for the third quarter, the company projects earnings in line or below market view. The company also issued earnings forecast for fiscal 2018.

In pre-market activity, Wal-Mart shares were trading at $79.30, down 2.07 percent.

For the second quarter, consolidated net income attributable to Walmart declined 23.2 percent to $2.90 billion or $0.96 per share from $1.21 per share lats year.

The latest quarter results included a charge of $0.17 for loss on extinguishment of debt in connection with the company’s recently completed debt tender offers. The charge was partially offset by the gain of $0.05 per share from the sale of the Suburbia business in Mexico.

Adjusted earnings per share were $1.08, compared to $1.07 last year.

Operating income in the quarter declined 3.2 percent from last year to $5.97 billion.

Total revenue was $123.436 billion, an increase of 2.1 percent from last year. Excluding currency, total revenue was $124.40 billion, an increase of 2.9 percent.

On average, analysts polled by Thomson Reuters expected earnings of $1.07 per share on revenues of $122.84 billion for the quarter. Analysts’ estimates typically exclude special items.

Net sales increased 2.1 percent from last year to $121.95 billion.

Walmart U.S. net sales grew 3.3 percent from last year to $78.74 billion.

Walmart U.S. comparable sales in the quarter increased 1.8 percent with traffic growth of 1.3 percent, marking the twelfth consecutive quarter with positive comp sales.

E-commerce growth at Walmart U.S. remained strong, led by organic growth through Walmart.com. Net sales and GMV grew 60 percent and 67 percent, respectively.

Net sales at Walmart International were $28.3 billion, a decrease of 1 percent. Excluding currency, net sales increased 2.5 percent. Nine of eleven markets posted positive comp sales, the company said.

Sam’s Club net sales grew 2.3 percent to $14.88 billion.

Looking ahead, for the third quarter, the company projects earnings per share of $0.90 to $0.98, while analysts estimate $0.98 per share. Comp sales for the 13-week period ending October 27 is expected to be a growth of 1.5 percent to 2 percent for Walmart U.S. excluding fuel and a growth of 1 percent to 1.5 percent for Sam’s Club excluding fuel.

For fiscal 2018, the company projects…

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