Walmart topped profit estimates for the first quarter as same-store sales grew at a pace not seen in nearly a decade and the retail giant’s e-commerce business continued to expand at a double-digit percentage rate.
“We have a stronger foundation in place with our stores, and we’re making good progress in eCommerce. We’re embracing new processes and technologies with the goal of serving our customers even better,” CEO Doug McMillon said in a statement.
Overall, revenue in the period was $123.9 billion, less than analysts expected. Profits grew 80 percent to $3.8 billion, or adjusted to $1.13 per share, higher than the $1.02 per share that Wall Street predicted.
E-commerce sales at the world’s largest retailer grew 37 percent in the first quarter, a decline from the holiday time period but a year-over-year increase. Same-store sales rose 3.4 percent, Walmart’s best quarterly growth in nine years, according to the company.
Earlier this week, Walmart rolled out a next day delivery service to challenge Amazon. The firm is introducing out the service in select cities but plans to expand the offering to roughly 75 percent of the U.S. by the end of 2019.
The Bentonville, Arkansas-based company is also testing new technology in its stores to more quickly fill customer orders, among other improvements. The bulk of Americans live within 15 miles of a Walmart store, a statistic the firm has capitalized on to push offerings like curbside pickup for groceries.
“We’re continuing our transformation to become more of a digital enterprise,” McMillon said.
Inventory at Walmart U.S. grew 5.9 percent in the period, an increase that could cause alarm among some analysts and one that the company attributed to “accelerated buying” in seasonal merchandise.
“We feel good about the quality of the inventory position and expect quantities to normalize as the year progresses,” CFO Bregg Biggs said.
Walmart returned $3.7 billion in the first quarter through dividends and share buybacks. The retailer launched a $15 billion repurchase program in 2017.
The company’s stock buybacks drew scrutiny earlier this year from Senate Minority Leader Charles Schumer of New York and Sen. Bernie Sanders, an independent from Vermont who caucuses with Democrats, who were pushing legislation to rein in the practice.
Walmart previously said it would offer associates 48-hours of paid time off and further incentivize those workers who have spotless attendance.