Walmart () reported excellent first-quarter results Thursday that showed solid comparable sales performance and international expansion. We liked the quarter and are maintaining our fair value estimate.
Walmart’s consolidated net sales grew 8.6% from the same period last year, despite currency fluctuations that worked against the company in the quarter. Walmart’s US comparable store sales jumped 2.6%, with both traffic and ticket price positive during the period. The company noted price separation and increased traffic for groceries and general merchandise for the ongoing improvement in US performance. Sam’s Club comparable sales, excluding fuel, increased 5.3%, while Walmart International grew 15% in the quarter.
The retailer’s consolidated operating income (which includes unallocated corporate overhead) jumped at roughly a similar pace as that of revenue, so we weren’t too excited about the company’s expense leverage during the period. However, Walmart International’s segment operating income jumped over 21% from the same period a year ago, which is quite notable. Walmart’s diluted earnings per share came in above the firm’s previously-issued quarterly guidance range at $1.09, up from $0.98 per share in the year-ago period (an 11%+ increase). Consensus estimates were for the firm to earn $1.04 per share in the quarter.
Looking ahead, Walmart expects that second-quarter fiscal 2013 diluted earnings per share from continuing operations to range between $1.13 and $1.18 per share. In March, the firm upped its dividend approximately 9% and now boasts an annual payout of $1.59 per share. We don’t think the firm’s alleged bribery scandal at its Mexican division will pose any risk to these numbers. In fact, we expect continued strong growth in Walmart’s dividend for some time to come, on the basis of our estimate of its Valuentum Dividend Cushion (1.3).