Walmart (NYSE:WMT) stock has been stagnant over the past month in the wake of a tragic mass shooting at its El Paso location in early August.
This reignited the gun debate in the United States and inspired some to call for the retail giant to remove weapons from its stores.
There was positive news on the macro front for Walmart in the middle of August. United States retail sales rose 0.7% month-over-month in July, registering the strongest reading in four months. Better news followed as Walmart released its second quarter 2019 results on August 15.
Same-store sales in the quarter posted 2.8% growth as e-commerce sales surged 37% from the prior year. Revenue came in at $130.38 billion and adjusted earnings per share were reported at $1.27. Both came above analyst expectations.
In the U.S. net sales rose 2.9% year-over-year to $85.2 billion. Walmart raised its forecast for adjusted EPS to “a slight increase” compared to its original projection of a marginal decline.
Walmart’s e-commerce sales have been encouraging, but the expansion has come at the cost of profitability. Its losses in e-commerce are expected to increase compared to 2018.
Shares of Walmart are still trading close to its 52-week high. It boasts a high price-to-earnings ratio of 25.4 and a price-to-book of 4.5. However, the stock has fallen out of technically oversold territory after spending most of July at unfavourable levels. Walmart is a retail giant to bet on in the long-term, but I’m looking for a more attractive entry point before pulling the trigger.
