Walmart (NYSE: WMT) released strong earnings for the second quarter of 2019, injecting a dose of positive news into a worrisome economic situation. As the world’s largest retailer, the company is often seen as a bellwether for the overall retail landscape.
Walmart posted adjusted earnings per share (EPS) of $1.27, handily beating analyst estimates of $1.22. The superstore also beat on revenue, coming it at $130.4 billion, a 1.8 percent increase year-over-year.
Walmart U.S. comparison sales increased by 2.9 percent, which is the strongest growth in more than 10 years, according to the company’s earnings report. Sam’s Club realized a smaller 1.2 percent increase in comparison sales over the same period last year.
Walmart saw e-commerce sales jump 37 percent year-over-year, fueled largely by online grocery sales. The company grew to 1,100 grocery delivery locations and over 2,700 pickup locations during the quarter. Walmart continued to grow its NextDay delivery service, which now covers about 75 percent of the U.S. population.
Sam’s Club experienced similar growth in the e-commerce segment, posting 35 percent gains year-over-year.
“From a performance point of view, we’re pleased with the strength we see in the business,” Walmart President and CEO Doug McMilon said. “Customers are responding to the improvements we’re making, the productivity loop is working and we’re gaining market share. We’re on track to exceed our original earnings expectations for the year, and that’s possible because of the work our associates do every day.”
The company did take a small hit on the international front due to the softening economic situation in Canada and the U.K. Multiple companies across several different industries have cited the softening in their earnings calls. Walmart, however, seems to have made up for the softening with strong domestic performance.
“Net sales at Walmart International were $29.1 billion, a decrease of 1.1 percent. Excluding currency, net sales were $30.4 billion, an increase of 3.3 percent. Strength in Walmex [Mexico] and China were offset by softness in the U.K. and Canada,” the company’s earnings report reads. “Operating income declined 2.9 percent, or 2.4 percent in constant currency, which was better than planned with strong results in the U.S. businesses.
Walmart released updated guidance for fiscal year 2020, coming in slightly more optimistic than original estimates.
The superstore also used its earnings release as an opportunity to address current public concerns over its stance on gun sales after the recent shooting in El Paso.
“Our hearts continue to be with our associates in El Paso and Southaven, and we are focused on the safety of our associates and customers in all our stores and clubs,” McMilon said in a brief comment about the situation.
Walmart stock was up over 5 percent during midday trading on Thursday, August 15.