Wal-Mart beats by $0.02, beats on revs; Q1 comps +2.1%
- Reports Q1 (Apr) earnings of $1.14 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $1.12; revenues (excludes membership and other income) rose 4.4% year/year to $121.63 bln vs the $119.29 bln Capital IQ Consensus.
- Walmart U.S. comp sales increased 2.1% (vs. estimates for +2.3%), and comp traffic increased 0.8%.
- Sam's Club comp sales increased 3.8% led by comp traffic growth of 5.6%. Tobacco sales negatively impacted comp sales by approximately 140 basis points.
- Since taking an initial stake in JD.com (JD), the market value of the company's investment had increased $3.7 billion as of January 31, 2018. In prior periods, the company was not required to include unrealized gains/losses within net income. Beginning in fiscal year 2019, due to a change in U.S. accounting principles, Walmart is now required to include unrealized gains/losses of certain equity investments within net income. This quarter, the company recorded an unrealized loss of $1.8 billion due to a decline in the JD.com stock price during the quarter.
- Guidance: The company's investment in Flipkart is expected to negatively impact fiscal year 2019 EPS by approximately $0.25 to $0.30 if the transaction closes at the end of the second quarter. As in past years, Walmart will update certain full year guidance with the second quarter release.
- Q1 Slide Deck