Walmart's second-quarter comparable sales rise most in a decade, shares soar

By Nandita Bose

NEW YORK (Reuters) - Walmart Inc on Thursday said its U.S. comparable sales grew the most in a decade and its e-commerce sales grew 40 percent, higher than 33 percent growth in the previous quarter, sending its shares up nearly 11 percent in premarket trade.

Walmart also raised its sales and earnings outlook for the full year, excluding any impact from its acquisition of Indian e-commerce company Flipkart, which it is still in the process of closing.

Sales at U.S. stores open at least a year rose 4.5 percent, excluding fuel price fluctuations, higher than analyst forecasts of 2.38 percent, according to Thomson Reuters I/B/E/S.

The growth was led by strong performance in grocery, apparel and seasonal merchandise, which rebounded in the second quarter after a slow start in April. Walmart has recorded nearly four straight years of U.S. growth, unmatched by any other retailer.

The strong e-commerce performance was driven by changes like a new website redesign and continued expansion of online grocery delivery. The retailer said it is on track to increase U.S. e-commerce sales by 40 percent for the full year.

The growth in online sales comes after a healthy first quarter performance when sales growth rebounded following a sharp slowdown during the crucial holiday months. That had spooked investors, who worried the retailer would not be able to keep pace with rival Amazon.com Inc.

The company's investments in cutting prices, higher freight costs driven by a shortage of truck drivers in the country and its continued investments in e-commerce continued to pressure margins.

Gross margins were down 17 basis points during the second quarter, the company said.

Walmart reported a net loss for the quarter ended July 31 of $861 million, or 29 cents a share, compared with net income of $2.9 billion, or 96 cents a share, a year ago. Excluding one-time items such as a loss related to the sale of a majority stake in Walmart Brazil, Walmart earned $1.29 per share, ahead of analysts' expectations of $1.22 per share, according to Thomson Reuters I/B/E/S.

Total revenue increased 3.8 percent to $128 billion, beating analysts' estimates of $125.97 billion.

For the full year, Walmart now expects to earn between $4.90 and $5.05 per share, up from a prior range of $4.75 to $5 a share and excluding any impact from its pending acquisition of Flipkart. The retailer said same-store sales in the United States should rise about 3 percent in fiscal 2019, up from a prior target of at least 2 percent.

Walmart's shares were up 10.73 percent at $99.88 in premarket trade. The company's stock has fallen around 9 percent since the start of the year.

(Reporting by Nandita Bose in New York; Editing by Frances Kerry)