Back slaps for Wal-Mart after earnings and strategic e-commerce play

 

Wal-Mart (WMT +1.8%) has now put in two straight quarters of outperformance in the retail sector. Though the 1.2% gain in store visits during Q2 and 0.4% increase in average ticket wasn’t earth-shattering, it compares nicely to major peers, and at Wal-Mart’s scale isn’t insignificant.

«Walmart’s strategic investments are generating traction, which is especially meaningful, given a large portion of its customer base remains challenged,» notes Moody’s analyst Charlie O’Shea. Buckingham Research analyst John Zolidis also praised the sales momentum, although he also points to the drop in operating income. Wal-Mart is one of just many companies that improve EPS growth through buyback activity even as underlying margins take a hit.

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RELACIONADA: Wal-Mart churns higher after boosting operating income

During the earnings call, Wal-Mart disclosed that Jet.com founder Marc Lore will lead the company’s overall e-commerce business. It’s any interesting development considering Lore’s close association with Amazon after selling several businesses to the Seattle online juggernaut. Lore is locked up with Wal-Mart for five years which is longer than a normal exec is tied to an acquiring company, according to Recode.

Wal-Mart cruised to a 52-week high of $75.19 earlier.

Fuente: Seeking Alpha


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