NEW YORK (AP) — Walmart raised its financial outlook for the year after beating Wall Street’s expectations for the quarter and seeing the strongest growth in more than a decade in sales at established stores. Its shares rose nearly 10 percent.
The upbeat report indicates that Walmart’s efforts to improve the experience shoppers have at its stores and expand its online services, particularly in grocery, are helping bring people to its websites and stores.READ MORE: MISSING: Cherish Taylor, 13, Last Seen In Auburn Gresham
Like many other retailers, Walmart is also benefiting from a stronger job market and rising confidence. Home Depot and Macy’s both raised their forecasts this week.
However, not everyone is benefiting. J.C. Penney posted a bigger-than-expected loss and saw a key sales metric fall well short of expectations, and it cut its full-year outlook again.
Walmart said sales were strong across many categories but the grocery business was notable with sales rising the most in nine years, fueled by fresh items like meat and produce.
That helped sales at stores open at least a year rise 4.5 percent at Walmart’s U.S. division, better than analysts expected.
The measure, an indicator of a retailer’s health, was helped by a more than 2 percent increase in customer traffic and in transactions.
With shoppers feeling confident, the National Retail Federation trade group raised its annual sales forecast this week, citing the results of tax cuts and an improving job market.
But it warned that trade wars between China and the U.S. could dampen consumer confidence in the second half of the year, the busiest time for retail. Walmart said that it’s using its scale to mitigate tariff effects.
Since buying Jet.com for more than $3 billion two years ago, Walmart has been bolstering its online business by acquiring brands like Bonobos and ModCloth. It’s also working to speed up delivery to compete better with Amazon, and is expanding same-day grocery delivery.
Walmart is also revamping its website with a focus on fashion and home furnishings.READ MORE: Jury Deliberations In R. Kelly's New York Trial Expected To Start Friday
It has teamed up with Lord & Taylor to offer the department store dedicated space on its site. The company said the grocery pickup service for online shoppers, at more than 1,800 stores so far, is helping attract new customers and existing ones are adding an extra item in their cart.
Those kinds of moves helped drive a 40 percent increase in online sales in the U.S. for the latest quarter. That was up from a 33 percent increase the previous period, after a dramatic growth slowdown in the critical fourth quarter.
Internationally, Walmart has been refocusing on areas with big growth potential like India and China. In May, it acquired a controlling stake in Flipkart, India’s largest online retailer, for $16 billion in its biggest acquisition yet. And it is selling its British unit, Asda, which has been struggling with intense competition from German no-frills discounters Aldi and Lidl.
But international investments hurt results in the latest quarter.
The Bentonville, Arkansas-based retailer lost $861 million, or 29 cents per share. It was affected by its investment in online retailer JD.com and a loss on selling a majority stake in Walmart Brazil. Adjusted for one-time costs, it earned $1.29 per share, easily topping Wall Street projections, according to Zacks Investment Research.
Revenue came to $128.03 billion, also beating projections.
Walmart now expects earnings for the current fiscal year of $4.90 to $5.05 per share, excluding charges related to Flipkart. Analysts expected $4.78 per share, according to FactSet.
Walmart shares rose $9.05 to $99.27.
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