With retailers of all types struggling to hemorrhaging losses in the wake of the rise of online retailers such as Amazon, one of the largest companies in the sector reported impressive Q2 earnings results.
Walmart (NYSE: WMT) saw its shares jump by over 6 percent on Thursday in response to their most recent financial results which were more than impressive for the 320-billion-dollar company. Even more impressive is the fact that the company has now become one of the top performing growth stocks, putting it neck and neck with Amazon for year-to-date gains.
Walmart said on Thursday that sales went up in the second quarter and that it even was raising its profit forecast for the year. Total revenue came in at $130.4 billion, an increase of 1.8 percent in comparison to the previous year. The company’s eCommerce sales growth went up by 37 percent, all despite the fact that net sales at Walmart International went down by 1.1 percent.
So far, the retailer has been one of the S&P 500’s top gainers, putting it on par to outpace Amazon’s growth so far in the year. Amazon’s shares are up around 18.3 percent so far. JJ Kinahan, the chief market strategist of TD Ameritrade, went on to say that Walmart surpassing Amazon in growth “would have been surprising to anybody 2 ½ years ago,” according to The Wall Street Journal.
So far, there has been a significant divergence among retailers between those who have been managed to survive the so-called retail apocalypse and those that have been falling apart.
Many have been shedding retail locations and cutting costs. Walmart appears to be one of the few major retail chains that have successfully navigated the challenges of being a retailer in the post-e-commerce era and even seems like it’s now going to take advantage of this shift for itself.
Shares of Walmart jumped by 6 percent in response to today’s news after the company boosted its guidance. In the first three months of the years, shares were hovering around the same price range but ended up surging almost 10 percent in June and July.
So far, the stock is up 21 percent for the year, putting it on par with Amazon for growth so far in 2019. While Walmart still has a relatively small market cap in comparison to Amazon, sitting at around $321 billion in comparison to the online retailer’s $878.6 billion, it’s interesting to see how these two companies develop over the rest of the year.
What is certain, however, is that no one would have expected Walmart to grow so substantially in 2019.
Walmart Company Profile
America’s largest retailer by sales, Walmart operates over 11,300 stores under 58 banners, selling a variety of general merchandise and grocery items. It’s home market accounted for 76% of sales in fiscal 2019, with Mexico and Central America (6%), the United Kingdom (6%), and Canada (4%) its largest external markets.
In the United States, around 56% of sales come from grocery, 33% from general merchandise, and 11% from health and wellness items. The company operates several e-commerce properties apart from its eponymous site, including Flipkart, Jet.com, and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-commerce accounted for about 5% of fiscal 2019 sales. – Warrior Trading News
