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WALMART'S FIRST QUARTER MARGINS UNDER PRESSURE

Aruba, May 18, 2018 - Walmart's first quarter margins under pressure, e-commerce rebounds

Walmart Inc on Thursday said profit margins during the first quarter remained under pressure due to price cuts and higher freight costs, weighing on its shares even as sales and earnings came in stronger than expected.
 
Walmart's gross margin, which has fallen for four consecutive quarters, was down 23 basis points in the quarter ended April 30. Within the U.S. division, operating income fell 3.1 percent from the prior year.
Shares of the world's biggest retailer traded 1.6 percent down in afternoon trade after initially opening higher. The stock has fallen around 20 percent from an all-time high in January.
 
The Street is trying to digest the margin performance and there are concerns around when they can make money given the large investments in e-commerce's€ said Brian Yarbrough, an analyst with Edward Jones.
The weak margins overshadowed strong first-quarter results and progress in Walmart's efforts to keep pace with rivals like Amazon.com Inc.
 
Walmart's e-commerce sales grew 33 percent, above the 23-percent growth in the previous three months. It said it is on track to increase U.S. e-commerce sales by 40 percent for the full year.
 
The e-commerce rebound comes after a sharp slowdown during the crucial holiday quarter, which sent its shares down over 10 percent and wiped out $31 billion from its market capitalization.
 
 

By orbitalnets.com