Wal-Mart Stores shares soared to an all-time high after the world’s largest retailer posted better-than-expected quarterly results that suggested it is holding its own in the competitive battle with Amazon.
For the third quarter, Walmart same-store sales in the U.S., excluding fuel, rose 2.7%, as grocery categories delivered the strongest quarterly performance in nearly six years. The average ticket at U.S. stores was up 1.2%.
Analysts had expected a 1.8% gain in comparable store sales, which have now increased for 13 consecutive quarters.
Wal-Mart revenue rose 4.2% year on year to $123.2 billion and adjusted earnings came in at $1 per share, beating estimates of earnings of 97 cents per share on revenue of $121 billion. On news of the third-quarter results, the company’s shares rose 10.9% to $99.62 in trading Thursday.
“We have momentum, and it’s encouraging to see customers responding to our store and e-commerce initiatives,” CEO Doug McMillon said in a news release.
Wal-Mart saw a 50% increase in U.S. online sales during the three month period that ended Oct. 31, following a 60% gain in the previous quarter. As USA Today reports, it “has been shaping up as one of the key competitors to Amazon,” acquiring Jet.com last year, tripling the number of items available on its website, and offering discounts to customers who pick up purchases they have made online.
“It won’t become Amazon, but it doesn’t have to,” Clement Thibault, an analyst with Investing.com, wrote in a client note. “It has to make sure it remains a viable alternative to Amazon,” he added. “The pie is big enough to sustain multiple players.”
For the full fiscal year, Wal-Mart is now calling for adjusted earnings per share ranging from $4.38 to $4.46. It previously expected to earn $4.30 to $4.40 a share, while analysts had forecast a per-share profit of $4.38.
“We expect top line growth going forward to be led more by comp sales and e-commerce with less emphasis on new units in the U.S.,” CFO Brett Biggs said on a conference call.