Walmart Q1 earnings: ‘easy money has already been made’

Walmart Inc (NYSE: WMT) opened in the green this morning after reporting better-than-expected results for its fiscal first quarter.

Shares are up also because the big box retailer raised its guidance for the full year.

Walmart now forecasts $6.10 a share to $6.20 a share of adjusted per-share earnings versus analysts at $6.14 a share. On CNBC’s “Squawk Box”, DCLA’s Sarat Sethi said:

Grocery is very strong. Consumers are spending more money on groceries, less on apparel. Walmart is doing really well with eCommerce; they’re taking share there. They’re trying to expand margins using tech.

Its current quarter outlook, though, came in shy of Street estimates. Versus its year-to-date low, Walmart stock is now up just over 10%.

Earned $1.67 billion versus the year-ago $2.05 billion
Per-share earnings also declined from 74 cents to 62 cents
Adjusted EPS printed at $1.47 as per the press release
Revenue went up 7.6% year-on-year to $152.30 billion
Consensus was $1.32 a share on $148.94 billion revenue
eCommerce and Sam’s Club sales jumped 26% and 4.5%

Other notable figures in the earnings report include Walmart U.S. sales and Walmart International sales that climbed 7.2% and 12%, respectively – both above expectations. According to Sarat Sethi:

At this point it’s hard to grow same-store sales because you have so much pricing embedded. So, I think in retail you have to be very careful now because the easy money has already been made.

TJX, he added, may be a better name to play the retail space even though Wall Street still has a consensus “overweight” rating on the Walmart stock.

The retail behemoth improved its operating margin some 30 basis points to 4.1% as operating costs climbed 7.2% in the recently concluded quarter (less than sales).