Walmart crushed expectations and shares are exploding
Walmart reported first-quarter profits and sales that were better than expected, unlike several other department stores that struggled to gain ground.
America's largest retailer earned $0.98 in adjusted earnings per share, beating the forecast for $0.88 according to Bloomberg.
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Its revenues totaled $115.9 billion, more than the $113.3 billion expected.
Walmart shares rose by as much as 9% in pre-market trading after the results crossed. Through Wednesday's close, they had risen 3% this year.
Comparable store sales — at Walmarts in the US open for at least one year — rose 1%.
"We are pleased to see the U.S. comp result, strong performance outside the U.S., membership trends in Sam's Club and EPS results versus guidance," said CEO Doug McMillon in the earnings statement.
"In addition, we are focused on building the ecommerce capabilities we need to drive growth to a higher level and deliver the seamless shopping experience for customers they desire."
That's an important move to make. After other retailers reported weaker-than-expected results last week, it became clear that their online strategies are not competing effectively with the likes of Amazon, as more consumers opt to shop remotely.
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After last week's retail earnings from the likes of Macy's and Nordstrom, there were some concerns about whether consumer spending was slowing down.
But the strong retail sales report at the end of the week showed that the consumer is getting stronger. Some analysts also noted that public companies account for only a fraction of total spending.
Walmart said its ecommerce sales rose 7%, and gross merchandise volume — the dollar value of all transactions — increased 7.5% on a constant currency basis, yet this was "not as strong as we wanted."
Grocery sales fell at Walmart stores because of food deflation, the company said. But that was balanced out a bit by stronger traffic to stores.