Walmart Q1 earnings: ‘easy money has already been made’

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Walmart Inc (NYSE: WMT) opened in the green this morning after reporting better-than-expected results for its fiscal first quarter.

Walmart stock up on raised outlook

Shares are up also because the big box retailer raised its guidance for the full year.

Walmart now forecasts $6.10 a share to $6.20 a share of adjusted per-share earnings versus analysts at $6.14 a share. On CNBC’s “Squawk Box”, DCLA’s Sarat Sethi said:

Grocery is very strong. Consumers are spending more money on groceries, less on apparel. Walmart is doing really well with eCommerce; they’re taking share there. They’re trying to expand margins using tech.

Its current quarter outlook, though, came in shy of Street estimates. Versus its year-to-date low, Walmart stock is now up just over 10%.

Walmart Q1 earnings snapshot

Earned $1.67 billion versus the year-ago $2.05 billion

Per-share earnings also declined from 74 cents to 62 cents

Adjusted EPS printed at $1.47 as per the press release

Revenue went up 7.6% year-on-year to $152.30 billion

Consensus was $1.32 a share on $148.94 billion revenue

eCommerce and Sam’s Club sales jumped 26% and 4.5%

Are Walmart shares worth buying?

Other notable figures in the earnings report include Walmart U.S. sales and Walmart International sales that climbed 7.2% and 12%, respectively – both above expectations. According to Sarat Sethi:

At this point it’s hard to grow same-store sales because you have so much pricing embedded. So, I think in retail you have to be very careful now because the easy money has already been made.

TJX, he added, may be a better name to play the retail space even though Wall Street still has a consensus “overweight” rating on the Walmart stock.

The retail behemoth improved its operating margin some 30 basis points to 4.1% as operating costs climbed 7.2% in the recently concluded quarter (less than sales).  

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