A blue Walmart shopping bag is shown at a store in Lewiston, Idaho, in the US. Picture: 123RF/FRANCIS DEAN
A blue Walmart shopping bag is shown at a store in Lewiston, Idaho, in the US. Picture: 123RF/FRANCIS DEAN

Walmart reported an estimate-beating jump in holiday-quarter comparable sales on Tuesday as a strong economy boosted consumer spending and fuelled more e-commerce purchases, sending shares of the world’s largest retailer up almost 5%.

The performance offered a glimpse into the health of the US consumer as spending was helped by a strong labour market and lower fuel prices.

“We still feel pretty good about the consumer. We haven’t seen much of a change,” Walmart CFO Brett Biggs said. “The data we are seeing still looks pretty healthy. Gas [fuel] prices are down year over year, which helps.”

US retail sales recorded their biggest drop in more than nine years in December, the government reported last week, as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.

Overall sales for the 2018 US holiday shopping season hit a six-year high as shoppers were encouraged by early discounts, according to a Mastercard report in late December.

Walmart sales at US stores open at least a year rose 4.2%, excluding fuel, in the fourth quarter ended January 31. The gain exceeded analysts’ expectations of 2.96%, according to Ibes data from Refinitiv.

Sales were also boosted after federal officials distributed food-stamp aid early due to the partial government shutdown, the company said.

Adjusted earnings per share increased to $1.41 per share, beating expectations of $1.33 per share, according to Ibes data from Refinitiv.

Online sales jumped 43% during the quarter, in line with the previous quarter’s rise, helped by the expansion of Walmart’s online grocery pick-up and delivery services and a broader assortment on its website.

The US retailer, which overtook Apple to become the third-largest e-commerce retailer in 2018, is likely to capture a 4.6% share of the US e-commerce market, behind eBay and Amazon, according to research firm eMarketer.

Walmart repeated its forecast that fiscal year 2020 earnings per share will decline in the low single digits in percentage terms, compared with 2018.  Excluding the acquisition of Indian e-commerce company Flipkart, it sees an increase in the low- to mid-single digits.

Walmart has recorded 18 quarters, or more than four consecutive years, of US comparable sales growth, unmatched by any other retailer.

The stock rose to $104.80, up 4.8% in premarket trading.

Reuters