Walmart’s earnings beat expectations as total sales rise, despite a hit in profits
New York — US retail giant Walmart’s profits took a hit, but earnings beat analysts’ expectations and total sales rose, according to results released on Thursday.
Net income was down $905m from the same period last year at $2.134bn. But the key earnings per share measure was $1.14, 2c higher than expected. And net sales, at $121.6bn, were up 4.4% over the same period last year — more than $1bn higher than expectations.
The decrease in net income is primarily due to a change in accounting policy related to Walmart’s 2016 equity investment in Chinese online distributor JD.com, of which Walmart holds a little more than 10%. In its guidance, the company cautioned that the recent purchase of Indian online marketplace Flipkart announced earlier this month, is expected to negatively impact earnings per share in the current fiscal year by 25c to 30c if the transaction closes at the end of the second quarter.
Walmart, which is trying to compete with online giant Amazon, saw comparable store sales rise 1.2% and customer traffic increase 0.8%, although the unseasonably cold weather hurt sales in the US.
US sales rose 2.1%, while international sales jumped 4.5%, while US online sales surged 33%. "We are changing from within to be faster and more digital, while shaping our portfolio of businesses for the future," Walmart CEO Doug McMillon said in a statement.
Following the release, the company’s stock was up more than 2% in pre-market trading to $87.85.