LONDON (ShareCast) - (Sharecast News) - US retail giant Walmart has bounced back from a soft first quarter, revealing a 40% increase in its domestic e-commerce sales for the three months to June, beating out the previous quarter's 33% rise.
Walmart's e-commerce figures became one of the retailer's most watched metrics following a slump in online sales growth during the all-important holiday quarter that left investors wondering whether or not the firm could compete with the likes of Amazon.

Same-store sales grew 4.5% year-on-year, the fastest pace in more than a decade, topping analyst forecasts of a 2.3% increase and grocery sales rose by the most in nine years on the back of improved fresh-food offerings.

E-commerce accounted for 100 basis points of the growth in comparable sales, with the core store business accounting for the remainder.

As a result, Walmart boosted its full-year forecasts for comparable sales and adjusted profit, anticipating a roughly 3.0% increase in the former versus a previous projection for a gain of "at least 2.0%".

Adjusted EPS meanwhile, before the costs associated with the the purchase of Flipkart, was now pegged at between $4.90-$5.05, instead of between $4.75-$5.00.

For the quarter, revenues rose 3.8% to $128bn and adjusted earnings per share increased to $1.29 per share, beating expectations on the Street for $1.22 in earnings per share result.

Analysts at RBC Capital Markets also pointed out the smaller-than-expected dip in the company's EBIT margins, from 5.6% to 5.4%.

"Thanks to the hard work of our associates, we had a great quarter with strong results and momentum across the business," said chief executive Doug McMillon.

"We're pleased with how customers are responding to the way we're leveraging stores and e-commerce to make shopping faster and more convenient," he added.

Another of Walmart's second-quarter highlights came from its Sam's Club warehouse chain, which saw comparable-store sales increase 5% year-on-year, more than double analysts' estimates and the unit's strongest quarter in six years.

"The stock is surging this morning (up ~10%) as these results may rekindle last year's bullish narrative of "Walmart is Amazon's only real competition" and the belief that margins on the verge of inflecting positively," RBC said.

"While we currently remain Neutral and continue to suspect that investment pressures will generally exceed expectations, if the company can maintain near MSD comps, they will likely be able to leverage their incremental expenses and this stock will continue to move forward."

As of 1345 BST, Walmart shares had jumped 10.67% in pre-market trading to $99.85 each.

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