Walmart Inc. (WMT - Get Report) posted much stronger-than-expected first quarter earnings Thursday as same-store sales in the United States beat expectations amid a renewed push in the retailer's e-commerce division.
Walmart said adjusted earnings for the three months ending in April, the retailer's fiscal first quarter for the 2020 financial year, came in at $1.13 per share, well ahead of the $1.02 forecast. Reported earnings rose 84.7% from last year to $1.33 per share, reflecting a 20 cents per share gain from the group's holding in China-based online retailer JD.com (JD - Get Report) .
Group revenues, Walmart said, rose 1% to $123.925 billion, missing analysts' forecast of $124.51 billion, as currency moves clipped the topline. Excluding currency impacts, Walmart said, revenues rose 2.5% to $125.8 billion, but the company cautioned currency moves would hit sales by around $1 billion over the current quarter.
"We're changing to enable more innovation, speed and productivity, and we're seeing it in our results," said CEO Doug McMillon. "We're especially pleased with the combination of comparable sales growth from stores and eCommerce in the U.S. Our team is demonstrating an ability to serve customers today while building new capabilities for the future, and I want to thank them for a strong start to the year."
Walmart shares were marked 3.7% higher following the earnings release at $103.59 each, a move that would extend the stock's year-to-date advance to around 11%.
U.S. same-store sales rose 3.4%, Walmart said, with net sales hitting $80.3 billion while e-commerce revenues surged 37%, although that growth rate slowed from 43% over the Christmas holiday quarter. International sales, however, fell 4.9% to $28.8 billion. Sam's Club revenues rose 1.5% to $13.8 billion.
Earlier this week, Walmart said it will launch a free, next-day delivery service to challenge its online rival Amazon Inc. (AMZN - Get Report) as retailers step-up their efforts to cater to changing consumption patterns in the world's biggest economy.
Walmart's NextDay delivery service will apply to around 220,000 frequently-purchased items on the Walmart.com website, the company said, and will be offered without a membership on all orders over $35. The new service will launch in Phoenix and Las Vegas, Walmart said, before expanding to Southern California in the coming days and around 75% of the broader U.S. population, including 40 of the top 50 major metro areas, by the end of the year.
Walmart's move follows a similar offering from Amazon, the world's largest online retailer, which shifted to one-day from two-day delivery for its Prime members last month -- who pay $119 per year for the loyalty club membership -- with a strategy it said will cost $800 million over its fiscal second quarter.