Walmart Sales Surge – By Todd Horwitz Chief Strategist, Bubba Trading.

 

Walmart Sales Surge

Stop being a prophet and make profits

Walmart emerged as one of the few lifelines to millions of people as the coronavirus spread, leading to surging profit and sales for the world’s largest retailer. Online sales in the U.S. jumped 74% for its fiscal first quarter that ended April 30, which captured the brunt of the pandemic’s outbreak. Same-store sales rose 10% at U.S. Walmart stores on strong sales of food, health, and wellness goods.

At a time when a huge swath of stores that sell non-essential merchandise temporarily shut down, Walmart has the natural advantage of carrying the very items that consumers need during a pandemic. The company said it absorbed about $900 million in additional costs related to Covid-19, including raising wages for warehouse workers and paying bonuses to its store staff. It also hired 235,000 new hourly workers to help it staff stores. However, Walmart still reported a higher operating profit for the period.

Overall, Walmart’s global revenue rose 8.6% to $134.62 billion and net income rose 4% to $4 billion. Excluding gains on its investment in China’s JD.com earnings per share were $1.18, slightly better than Wall Street was expecting. Shares rose 1% to $128.95 in early Tuesday trading. The stock has gained nearly 30% from a year ago and is hovering near a record of $132.33 reached last month.

Executives said the company was withdrawing its financial forecasts for the rest of its fiscal year, citing the uncertainty and restrictions caused by the virus. However, they said the company was well positioned to operate through the crisis and Walmart has benefited from bricks-and-mortar closures and slowing shipping speeds at some online players. “It is a big advantage being an omnichannel retailer and I think that is showing right now. We had backups in our fulfillment centers too” but were able to quickly use stores to fill online orders, Walmart finance chief Brett Biggs said in an interview. “That is something that our competitors, they can’t all do it.”

Walmart said the number of new customers trying its online grocery pickup and delivery services grew fourfold since mid-March. Some of those shoppers will go back to old habits, Mr. Biggs said but “I think this time people are going to remember who was really there for them.”

**We are now offering a comprehensive commodity report that complements our other services. The Technomental Commodity Report comes out on Wednesday evenings and provides comprehensive fundamental and technical coverage of most commodities that trade on the futures markets in the US and UK, as well as stocks, bonds, and digital currencies.

There is a summary report on Friday after the markets close, and robust quarterly reports on each of the six commodity sectors and a general overview that recaps the past three months and offers projections and suggestions for the next quarter. Andy Hecht, the author of the report, has been a commodity trader since the early 1980s and has vast experience in markets across all asset classes.

Sign up here:
Bubba Trading Technomental Report

Todd “Bubba” Horwitz
BubbaTrading.com

Financial Markets and Political Commentary
 

Tags

, , , ,

Related Posts

About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.