Walmart's U.S. comparable sales rise most in decade, shares soar

By Nandita Bose

NEW YORK (Reuters) - Walmart Inc on Thursday reported quarterly earnings and sales that topped estimates, as more shoppers visited its stores and a revamped website drove purchases online, sending its shares soaring more than 11 percent in premarket trade.

The world's largest retailer 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.

Walmart's U.S. comparable sales grew the most in a decade boosted by strong performance in grocery, apparel and seasonal merchandise, which rebounded in the second quarter after a slow start in April. Walmart has recorded four straight years of U.S. growth, unmatched by any other retailer.

Its U.S. e-commerce growth also ticked higher than previous quarters, driven by changes like a new website redesign and continued expansion of online grocery offerings. E-commerce sales grew 40 percent, up from 33 percent growth in the previous quarter. 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 sales performance overshadowed ongoing margin pressures driven by investments in cutting prices, higher freight costs due to a shortage of truck drivers in the country and its continued investments in e-commerce.

Gross margins fell for the fifth consecutive quarter and were down 17 basis points, the company said.

International sales were up 3.1 percent at $ 29.2 billion on a constant currency basis, helped by strong comparable sales in four of its largest overseas markets.

The company has taken steps to fix its international business portfolio. In June, Walmart said it has sold an 80 percent stake in its Brazilian operations to private equity firm Advent International.

Walmart also recently sold a majority stake in its UK arm ASDA to J Sainsbury Plc and paid $16 billion for a majority stake in Indian e-commerce firm Flipkart.

The retailer also reached agreements to sell its banking operations in Walmart Canada and Walmart Chile.

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.

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 10.82 percent at $99.99 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)