Wal-Mart Strong Q1 Earnings: EPS, Revenue Beat Expectations

May 20th, 2016 by Trefis Team
-5.13%
Downside
92.52
Market
87.77
Trefis
WMT: Walmart logo
WMT
Walmart

Wal-Mart (NYSE:WMT) exceeded expectations in its first quarter fiscal 2017 results on Thursday, May 19th. The fact that it beat revenue amidst a strong dollar is truly impressive. The net revenues on a constant currency basis increased 4% year over year to $119.4 billion. On reported basis, total revenue increased 0.9% year over year to $115.9 billion, which was $2.7 billion more than the estimates. Wal-Mart did post a lower earnings of $0.98 per share for the first quarter, but still it was above the top end of the company’s guidance. 

Its net operating income decreased by 7.1% due to  investments in technology and currency rate fluctuations. Wal-Mart indicated that comparable sales growth for its fiscal Q1 was 1%.

wmtearnings7

Relevant Articles
  1. Up 32% Since Beginning of This Year, Will Walmart’s Strong Run Continue Following Q2 Results?
  2. Up 15% This Year, Will Walmart Stock Rally Further After Q1 Results?
  3. Where Is Walmart Stock Headed Post Stock Split?
  4. Up 7% Already This Year , Where Is Walmart Stock Headed Post Q4 Results?
  5. Up 18% This Year, Will Walmart Stock Continue To Grow Past Q3?
  6. Can Walmart’s Stock Trade Lower Post Q2?

wmtearnings4

A stronger dollar implies that Wal-Mart can get more value for its money on the international front and invest more of its earnings into the international operations. In the first quarter, international sales made up only 24% of the total revenue. Since the U.S. makes up only 5% of the world’s population, Wal-Mart should capitalise on the domain outside US to grow its sales.

wmtearnings2.1

Wal-Mart’s continues to be essentially a brick and mortar retailer with a growing foot traffic as a result of better customer experiences at the store.  Though its e-commerce sales have been gradually rising 7% on a constant currency basis, their primary focus has always been on the customers visiting their stores.

Wal-Mart expects second quarter fiscal 2017 earnings per share to range between $0.95 and $1.08. It also expects comp sales for Walmart U.S. to be nearly 1.0%.guid

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Wal-Mart

Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap |More Trefis Research