Fiscal first quarter revenue and earnings per share for Walmart Inc. beat the consensus estimates, although acquisitions and investment in e-commerce initiatives made by the global retail giant continue to result in operating income declines.
Bentonville-based Walmart early Thursday (May 17) reported first quarter net income of $2.134 billion, down almost 30% compared to the $3.039 billion in the same quarter of the previous year.
However, new accounting rules required the retailer to post a $1.845 billion “unrealized” loss from the decline in value of its investment in JD.com, a retail website based in China. Adjusted earnings per share without the JD.com accounting loss was $1.14, better than the consensus estimate of $1.12.
Total revenue in the quarter was $122.69 billion, up 4.4% compared with $117.542 billion in the same quarter of fiscal 2017. The consensus estimate was $120.47 billion. The company also reported a 33% gain in e-commerce sales during the quarter.
“We delivered a solid first quarter, and we’re encouraged by the continued momentum across the business. We’re transforming to better serve customers. We are changing from within to be faster and more digital, while shaping our portfolio of businesses for the future,” Walmart CEO Doug McMillon noted in the earnings report. “Our strong cash flow and balance sheet provide flexibility to do so. I want to thank our associates and our leadership team for the choices they’re making, their strong sense of urgency and the actions they’re taking. Our people make the difference, and I’m proud to work with them.”
Operating income during the quarter was $5.154 billion, down 1.6% from the same period in fiscal 2017. Most of the operating income decline was the result of a 3.1% drop in operating income in the Walmart U.S. segment, the company’s largest division.
But revenue and comp sales for Walmart U.S. were positive. Net sales in the segment totaled $77.748 billion, up 3.1%. Same-store sales – without fuel – were up 2.1% in the quarter. Store traffic was up 0.8%, and the average ticket was up 1.3%.
Net sales with Walmart International reached $30.26 billion, up almost 12% compared with the same quarter in fiscal 2017.
“Eight of eleven markets posted positive comp sales, including our four largest markets,” the company said of its international division.
Net sales were down at Sam’s Club, but most of the underlying metrics were solid. Net sales fell 2.7% in the quarter to $13.622 billion. Same-store sales – without fuel – were up an impressive 3.8%, with store traffic up 5.6% during the quarter. The average ticket was down 1.8%, compared with being up 0.5% in the same quarter of 2017.
Walmart shares (NYSE: WMT) closed Wednesday at $86.13, up $1.61. Walmart posted the earnings report Thursday before the markets opened. During the past 52 weeks the share price has ranged between $73.13 and $109.98.