Shares in US retail giant Wal-Mart slid almost 3% in pre-open trading this morning (16 August), despite a 5.7% increase in second-quarter net income and an improved full-year outlook.
The company said today that net income in the three months to 31 July totaled US$4.02bn, up from $3.80bn in the comparable period of last year.
Net sales increased 4.5% to reach $113.5bn in the quarter. In the US, sales increased a total of 3.8% over the quarter to reach $67.3bn. US comparable-store sales rose 2.2%, its fourth consecutive quarter of positive ID sales. Meanwhile, Wal-Mart’s international division recorded 6.4% growth to reach $32bn.
Wal-Mart also raised and narrowed its full-year EPS guidance range to $4.83-4.93, up from previous guidance of $4.72-4.92.
However, in pre-market trading Wal-Mart shares fell 2.17% to $72.43 because sales failed to meet street estimates, primarily due to a $2.2bn hit from currency exchange.
Janney analyst David Strasser attributed the early decline in stock price to some “profit taking” after a “strong run”, which saw shares climb 25% over the past quarter.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNevertheless, Strasser maintained that Wal-Mart stock remains an attractive option. “The capital allocation story and business momentum will give this stock legs going forward,” he suggested.
Click here for just-food’s more detailed examination of Wal-Mart’s Q2 numbers