>> Walmart shares climbing on Thursday after the company reported quarterly earnings. But the stock price moving, not only because the world's largest retailer reported better than expected profits and raised its forecast for the fiscal year, something else entirely. Rewind, the company had been under pressure from labor activists, its own shareholders, and even the White House to pay its employees more money.
And earlier this year Walmart announced plans to invest $2.7 billion over 2 years to increase entry level wages up to 10 bucks an hour. That promise to spend more on its workforce should have guaranteed a drop in profit, not the kind of things Wall Street likes to see.
But on Thursday Walmart said the higher wages led to cleaner stores, faster checkouts, and overall improved customer service. Sales at stores opened for at least a year rose 1.6%. Store visits rose 1.2%, and Wall Street cheered. Shares leapt 4% at the open before coming down in intraday trading, but were still positive midday.
The share bumped despite the fact that the higher wages did, in fact, take some bite out of profits. Operating income was down 7.2%. Perhaps most notably, the company bucked a string of weak results from other retailers, Target, Macy's, Kohl's. But Walmart may not wanna be compared to other brick and mortar operations.
First, its online sales continue to grow, up almost 12% this quarter. And second, it recently paid more than $3 billion to buy e-commerce site jet.com, signs of a company clearly hoping to close the gap with online giant Amazon.