During the quarter ending Oct. 31, Walmart generated revenue of $123.2 billion, up 4.2% year over year. Adjusted earnings of $1.00 per share were up about 2% from the same quarter last year. Analysts surveyed by FactSet expected Walmart to report earnings of 97 cents per share on sales of $121 billion.
U.S. same-store sales rose 2.7%, with same-store traffic increasing 1.5%. U.S. e-commerce sales, an area of focus for the company, grew 50%.
The Bentonville, Arkansas-based company also raised guidance. It's only the second time since 2001 that Walmart beat EPS estimates, beat sales estimates and raised its outlook, according to Bespoke Investment Group.
Before this quarter, Walmart has surpassed analysts' expectations over the past eight consecutive quarters, noted Gordon Haskett Research Advisors analyst Chuck Grom, with an average EPS beat of about 4 cents per quarter.
Since July 16, when Amazon.com Inc. (AMZN) - Get Amazon.com, Inc. Report announced its $13.7 billion acquisition of Whole Foods, Walmart shares are up about 20%, ahead of Amazon's own increase of about 14% during that period, as investors became more and more confident in Walmart's strides in online retail.
Walmart e-commerce head Marc Lore
"To use an analogy from a savvy client: A wall went up on June 16th," wrote Barclays analyst Karen Short. "As a food retailer, you were either on the right or wrong side of the wall. In our view, WMT was clearly on the right side, but even prior to June 16th, WMT had made significant progress in changing the narrative by evolving its capabilities as a dominant omni-channel retailer, so from our perspective, historical valuation ceased to matter on June 16th."
Given Walmart's ability to "demonstrate a credible, viable strategy against AMZN" and its massive scale, e-commerce abilities, geographic reach, free cash flow, balance sheet and "differentiated business model," the company's "earnings growth is almost secondary," Short added.
Since its $3.3 billion acquisition of Jet.com, which closed Sept. 19, 2016, Walmart has "acted decisively and with a sense of urgency to create a better shopping experience for customers through an improved in-store experience and it has greatly expanded its offering of e-commerce products and services, many of which leverage its existing bricks and mortar stores," she wrote, noting that Walmart has 13 times Whole Foods' sales and 10 times its stores.
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With Jet and other add-on e-commerce acquisitions like Modcloth and Bonobos, Walmart is targeting a more affluent customer. On Tuesday, for instance, the company announced a partnership with Lord & Taylor, owned by Hudson's Bay Co. (HBAYF) , through which the upscale retailer will introduce a "specialized online experience offering premium fashion brands" on Walmart's website and app.
Like rivals Amazon, Costco Wholesale Corp. (COST) - Get Costco Wholesale Corporation Report , Kroger Co. (KR) - Get Kroger Co. (KR) Report , Target Corp. (TGT) - Get Target Corporation Report and Ahold Delhaize (ADRNY) , Walmart also intends to expand its private label offerings at both lower and higher price points.
It's still focusing on everyday low prices despite its new product and technology investments: Gordon Haskett's Grom, for instance, found that a basket of Walmart products is cheaper than offerings at discount retailers Dollar General Corp. (DG) - Get Dollar General Corporation Report and Family Dollar Stores Inc. (FDO) .
Walmart shares rose 3.1% to $92.63 in premarket trading Thursday.
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