SUMMARY: Wal-Mart Stores Inc.’s efforts to improve its stores, coupled with wage gains by its core U.S. lower-income shoppers, helped power the retail giant through a quarter where many of its competitors struggled with soft demand. The world’s biggest retailer posted an unexpected nearly 1% increase in first quarter revenue and predicted sales in existing stores would rise this quarter, bucking a string of weak results from other U.S. retailers. Wal-Mart’s shares jumped 9.6% to $69.20 at 4 p.m. in New York trading on Thursday, one of the stock’s largest one-day percentage gains since October 2008, according to FactSet.
1. How did Wal-Mart stock react to news that revenues had unexpectedly risen 1% in the first quarter?
2. Why do you think Wal-Mart’s stock rose despite falling profits, falling international sales, and slowing e-commerce growth?
3. Wal-Mart states that increasing pay for its employees contributed to sales growth. Do you agree? Why or why not?
4. Why do you think food shopping has been slow to shift online?