Higher sales and a cost-control program at U.S. stores drove a 2.5% sales rise during the most-recent quarter with U.S. same-store sales rising 3.2%

An expanding e-commerce initiative and new investments in India and China will also help fuel future growth.

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WALMART INC. (New York symbol WMT; www.walmart.com) lets you tap the company’s 11,348 outlets in 27 countries. Those stores serve a total of 275 million customers each week.

The retailer’s 4,759 locations in the U.S. supply 66% of its total sales. Walmart first gave its investors global exposure in 1998 when it opened its first store outside the U.S. That was through a joint venture with a Mexican retailer. Its international unit (23% of total sales) now operates 6,080 stores.

The remaining 11% of the company’s sales come from its Sam’s Club warehouse stores; they sell a variety of goods at wholesale prices. There are now 599 locations in the U.S.

The company’s sales fell 0.7%, from $485.7 billion in 2015 to $482.1 billion in 2016 (fiscal years end January 31). That’s mainly because the higher U.S. dollar hurt the contribution of Walmart’s international business.

Thanks to rising sales though its e-commerce channels, Walmart’s sales then increased by 0.8% to $485.9 billion in 2017, by 3.0% to $500.3 billion in 2018, and by 2.8% to $514.4 billion in 2019.

The negative impact of currency rates also helped cut the company’s overall earnings by 18.1%, from $16.43 billion in 2015 to $13.45 billion in 2017. Walmart likes to reward investors with share buybacks, which is why earnings per share fell at a slower rate of 14.8%, from $5.07 to $4.32.

Earnings fell again to $13.28 billion in 2018, but per-share earnings improved to $4.42 in 2018. Thanks to the higher sales and a cost-control program at its U.S. stores, the company’s 2019 earnings rose to $4.91 a share (or a total of $14.46 billion).

In its fiscal 2020 third quarter, ended October 31, 2019, Walmart’s sales rose 2.5%, to $127.99 billion from $124.89 billion a year earlier. If you exclude the negative impact of currency rates, sales gained 3.3%.

In the quarter, U.S. online sales jumped 41%, in part because of strong demand for groceries and the expansion of home delivery services. As a result, the company’s U.S. same-store sales rose 3.2%. That reflects a 1.3% increase in the number of transactions and a 1.9% increase in customer spending per visit.

Walmart earned $3.29 billion, up 92.3% from $1.71 billion a year earlier. The company again rewarded investors with share buybacks in the quarter, spending $1.12 billion. As a result, earnings per share jumped 98.3%, to $1.15 from $0.58.

The company ended the quarter with cash of $8.6 billion. Its long-term debt of $44.9 billion is also a low 13% of its market cap.

Blue Chip Stocks: Online sales and China should boost growth

Walmart is using that strong balance sheet to add value for shareholders by investing its online businesses. That includes expanding home delivery. In the current fiscal year, it will likely spend $5 billion on its e-commerce operations.

The company is also building up its overseas online operations. For example, in August 2018, it paid $16 billion for 77% of Flipkart. That privately held firm is a leading online retailer in India, with annual sales of $4.5 billion.

Flipkart will help Walmart tap into India’s fast-growing e-commerce market. That company’s expertise should also benefit Walmart investors by improving the performance of its e-commerce platforms in other countries.

Another focus for Walmart is China. It now plans to open 500 new stores in as little as five years. The company also holds 10% of Chinese e-commerce firm JD.com. It is using the alliance to sell goods from its Chinese stores. In fact, over 100 of its 443 stores now double as JD warehouses.

However, U.K. competition regulators recently blocked Walmart’s deal to merge its Asda Group grocery chain in with J Sainsbury plc. Walmart would have owned 42% of the combined U.K. firm and received $4.0 billion in cash.

In response, the company is now considering the sale of Asda, or at least offering shares to the public through an initial public offering. Follow a successful IPO, Walmart could opt to gift investors with its remaining Asda shares. That would most likely be as a special dividend.

For fiscal 2020, Walmart expects total earnings to rise slightly. Earlier, it predicted a small decline. The stock has jumped 29% for investors in the past year, and now trades at a high 24.3 times Walmart’s forecast 2020 earnings of $4.95 a share. That p/e is acceptable given the company’s market share and rising e-commerce business.

Walmart investors have also enjoyed an annual dividend hike every year since 1974. The latest—1.9%—came in April 2019. You now receive $0.53 a share, up from $0.52. The new annual rate of $2.12 gives investors a solid 1.8% yield.

Recommendation in Wall Street Stock Forecaster: Walmart Inc. is a buy.