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

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.