Stocks

Wal-Mart Stores, Inc., Home Depot Inc Rise After Solid Earnings Reports

Walmart and Home Depot released their latest earnings reports before opening bell this morning, both posting results that were better than expected. Shares of both retailers moved higher in premarket trading this morning.

Walmart reported earnings of $1.03 per share, including a positive impact of 4 cents per share from a lease adjustment, and revenue of $117.41 billion for the third quarter of fiscal 2016. In constant currencies, Walmart’s revenue was $122.4 billion, a 2.8% increase from last year. Analysts had been expecting earnings of 98 cents per share and revenue of $118.1 billion. In last year’s third quarter, the big box retailer posted earnings of $1.15 per share and $119 billion in revenue.

Home Depot reported earnings of $1.35 per share on revenue of $21.82 billion. Analysts had been expecting earnings of $1.32 per share and $21.77 billion in revenue. In the same quarter last year, the home improvement retailer reported earnings of $1.15 per share and $20.52 billion in revenue.

Walmart sees solid growth

walmart logo

International net sales amounted to $29.8 billion. In constant currencies, sales were $34.7 billion internationally led by Canada and Mexico. The retailer recorded about a 10% increase in e-commerce sales and gross merchandise volume. Walmart said challenges in some of its key international markets pressured these metrics.

Walmart’s comparable store sales in the U.S. increased 1.5%, marking the fifth quarter in a row in which U.S. comparable sales were positive. The retailer said traffic improved by 1.7% and its customer experience scores kept strengthening. Comparable store sales for the Neighborhood Market locations rose by about 8% with newer stores showing the strongest growth.

The company’s management also narrowed their full year guidance for fiscal 2016. They expect earnings of $4.50 to $4.65 per share, which implies earnings of between $1.40 and $1.55 per share and includes currency headwinds of about 16 cents per share. The previous full year guidance was for earnings of between $4.40 and $4.70 per share.

Shares of Walmart moved higher by as much as 2.7% to $57.87 per share n premarket trading this morning.

Home Depot’s comparable sales rise

Wal-Mart Stores, Inc., Home Depot Inc Rise After Solid Earnings Reports

Home Depot said its net earnings result included a negative impact of 1 cent per share for expenses related to the data breach in 2014. The company’s same store sales in the U.S. grew 7.3% in the U.S. during the third quarter. Globally, comparable store sales grew 5.1%.

Management at Home Depot now expects sales for the full year to grow by about 5.7% and comparable store sales to increase by about 4.9%. They project about a 14% increase in earnings per share, which would bring the metric to about $5.36.

Shares of Home Depot rose by as much as 2.97% to $124.39 per share in premarket trading this morning.