(BFM Stock Exchange) – The world number one in distribution has delivered higher income for expectations for its second quarter but its profits disappointed due to stronger insurance compensation.

For several quarters, Walmart has displayed robust results, thanks to major market share gains. The size of the American distribution giant, which is simply the company listed with the largest turnover in the world (684.2 billion dollars last year), allows it to generate efficiency gains on its supply chain. Then reinvest them in prices and promotions, and therefore attract more customers.

“Walmart’s unrivaled scale compared to its competitors in traditional distribution allows it to adapt effectively to a dynamic commercial landscape,” explains Morningstar.

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“Walmart benefits from a significant physical presence and a solid positioning within the communities it serves, which allows it to be close to the vast majority of American consumers. In addition, its large assortment of low -priced products has enabled it to maintain its status as a national leader,” added the financial intermediary.

Consequently, its action has greatly appreciated, taking 31% over a year and 120% over three years.

Reverse of the medal: its valuation is high or even tense. A few days ago, Bank of America noticed that the title was exchanging around 34 times the expected action, almost a 20 years old.

To give an idea, this multiple rises around 6-7 times at Carrefour, between 12 and 14 times at Tesco, and between 12 and 13 times at Ahold Delhaize, a Belgian-Dutch distributor.

A rare failure

This type of valuation does not leave much room for disappointments. However, this Thursday, August 21, Walmart published lower profits from expectations for its second quarter, which overshadows a better than expected sales dynamics as well as the raising of its annual forecasts.

At the start of the session at Wall Street, the Walmart action dropped by 4.6%, underperforming the S&P 500 (-0.4% at the same time).

In the second quarter of its fiscal year, a period that extends from May 1 to the end of July at Walmart, the company’s adjusted operating profit increased from $ 0.4% to 8 billion dollars, while adjusted action per share, reference indicator to Wall Street, increased from 1.5% to $ 0.68.

According to a consensus quoted by Bank of America, analysts were tabling on an adjusted operating profit of $ 8.56 billion and a profit per adjusted share of 73 cents.

According to Reuters and Bloomberg, Walmart had not published a profit by action below expectations for more than three years.

In addition to higher restructuring charges, the large distributor explains that his accounts were grew by an increase in health compensation requests from his employees, the group providing his own insurance to his staff. Judicial costs have also weighed.

Objectives raised

This hitch relegates to the background the rest of the company’s publication. Walmart notably generated stronger growth than expected, with an increase in its revenues of 5.6% excluding exchange effects at 177.4 billion dollars.

Online sales displayed an increase of 25% while sales with many comparable stores in the United States, an indicator monitored by analysts, increased by 4.6% over a year.

According to a consensus quoted by Bank of America, analysts were tabling on revenues of $ 175.8 billion and growth in the United States with a number of comparable stores of 3.7%.

At the end of this quarter, Walmart noted its forecast for growth and profit by action for all of its current exercise. The company expects an increase in its income between 3.75% and 4% excluding exchange effects, compared to 3% to 4% before. Adjusted action per share is expected between $ 2.52 and $ 2.62 compared to 2.5 dollars at 2.6 dollars, a recovery due to less unfavorable than initially expected exchange effects.

For the third quarter alone, the group anticipates an increase in its income of 3.75% to 4.75% excluding exchange effects and a profit per share located between 58 cents and 60 cents.

Walmart is moderately exposed to American customs duties, Bank of America encrypting this exposure to approximately a third of the cost of marketed goods.

According to CNBC, the director general of Walmart Dougmcmillon, however, said at a conference with analysts that households with low and means income had been more sensitive than others to the price increases due to customs duties, in particular at the level of the categories of discretionary products.