Walmart Inc. posted earnings for the first quarter that were stronger than had been expected on Thursday and affirmed its opinion that the acquisition this month of Flipkart in India would hit the bottom line in 2018.
Walmart added that adjusted earnings for the three-month period through April reached $1.14 a share or 2 cents higher per share than analyst expectations. Group revenues reached $121.68 billion equal to a 4.4% increase over the same period one year ago and topping Wall Street expectations of over $120.5 billion. Walmart added that sales online increased by over 33%.
CEO Doug McMilon said the company was able to deliver a strong quarter and was encouraged by its continued momentum across the entire business. He added that the company was changing so it could be faster as well as more digital.
McMilon added that he wanted to thank all the company’s associates as well as the leadership team for choices they are making, the actions they have been taking and the sense of urgency they have. He said Walmart’s people are the difference and he was proud to be working together with them.
Shares of Walmart closed Wednesday at $86.13 after increasing by 1.94% during the session and that helped to cut the decline since the start of 2018 to just 12.8%. After the earnings released early Thursday morning, shares move up nearly 1% in premarket trading.
Walmart confirmed last week its largest-ever acquisition when it unveiled the details of a deal of $16 billion with Flipkart, based in India, that helps launch the largest retailer in the world into the second largest country in the world by population and edged out the reported interest in Flipkart by its biggest rival Amazon.com.
Walmart is taking a share of 77% in Flipkart, the fast-growing online group that dominates retail e-commerce in India. It said it would support the move by the group to become a publicly listed and majority owned subsidiary over the long term.
However, the acquisition will hurt the earnings per share of the full year by 25 cents to 30 cents per share, said Walmart if the deal can close before the current quarter ends.
Across the U.S., Walmart said its comparable sales increased 2.3%, while comparable sales for Sam’s Club, roses by 3.8%. Both figures do not include fuel.
In all, Sam’s Club contributed over $13.62 billion to the topline in the U.S. for Walmart of $77.75 billion.