Walmart on Thursday reported its best U.S. same-store sales growth in more than a decade, highlighted by a pickup in online sales and the strength of its grocery business.
Analysts said the grocery gains in the second quarter may ease fears that Walmart can compete with the Amazon. Wall Street had also been concerned that growth in the retail giant’s digital operations was starting to slow.
On news of the earnings, Walmart shares rose 9.6% to $98.95. It was “a banner quarter on multiple fronts,” Moody’s lead retail analyst Charlie O’Shea said.
Overall sales at U.S. stores open at least a year rose 4.5%, easily beating analysts’ estimates of a 2.4% increase. The grocery and apparel departments, where Walmart has invested heavily to compete with the likes of Amazon and Kroger, performed particularly well.
E-commerce sales grew 40% in the quarter and Walmart said U.S. online sales are on track to rise 40% for the full year. Digital sales growth had slowed from a 50% jump in the third quarter of last year, posting only a 33% gain in the first quarter of 2018.
“We’re pleased with how customers are responding to the way we’re leveraging stores and e-commerce to make shopping faster and more convenient,” CEO Doug McMillon said in a statement.
As CNBC reports, Walmart “recently redesigned its website, purchased the biggest e-commerce player in India — Flipkart — and struck a partnership with Lord & Taylor that brings new merchandise to Walmart.com. The retailer is also investing heavily to add more delivery options for shoppers.”
Walmart now offers curbside pickup of online grocery orders in 1,800 U.S. stores, and the service is bringing in new customers, CFO Brett Biggs told Reuters.
For the quarter ended July 31, the company reported a net loss of $861 million, or 29 cents a share, compared with net income of $2.9 billion, or 96 cents a share, a year ago.
But excluding items, Walmart earned $1.29 per share, 7 cents ahead of analysts’ expectations. Total revenue rose 3.8% to $128.03 billion from a year ago, surpassing expectations of $125.97 billion.