Shares of Wal-Mart Stores Inc. surged 9.6 percent to $69.20 on Thursday after the world’s largest retailer surprised investors and beat analyst estimates with a comp-store sales increase of 1 percent at Wal-Mart U.S. in the first quarter. Wall Street was expecting a gain of 0.5 percent.

The positive comp was due to continuing traffic increases, which rose 1.5 percent in the quarter ended April 30, marking the seventh consecutive quarter of positive comp-store sales and sixth consecutive quarter of positive comp traffic.

The surprise results at Wal-Mart came a day after rival Target reported a similar strong quarter, but Target’s shares dropped sharply Wednesday on its cautious outlook for the second quarter.

Earnings per share fell 4.9 percent to 98 cents from $1.03 in the first quarter of 2016, yet beat the analyst consensus estimate of 88 cents.

Revenue increased 0.9 percent in the period to $115.9 billion from $114.8 billion in the prior year’s first quarter, above the $113.3 billion predicted by analysts. On a constant currency basis, total revenue was $119.4 billion, an increase of 4 percent from the previous year’s $114.8 billion. Net income declined 7.8 percent to $3.079 billion in the 2017 first quarter from $3.34 billion in the 2016 period.

“It’s exciting to see the improvement in core retail fundamentals,” said Doug McMillon, president and chief executive officer of Wal-Mart Stores Inc. For example, “I’m encouraged by the progress we’re making on inventory. That progress is important in its own right and for cash flow purposes, but it can also help create a virtuous loop. When combined with our investments in training and associate education, wages and store structure, it’s giving our associates more time on the sales floor to serve customers.”

McMillon said the company did a better job of managing costs in the first quarter of 2017. “SG&A discipline improved, as our store teams did a good job of more closely aligning expenses with sales growth,” he said. “Better expense management in the quarter gave us increased confidence to initiate our next phase of U.S. price investment earlier than planned. Over time, we intend to lower prices further in a deliberate, strategic way to drive our productivity loop. Doing this in a sustainable way takes time and we’re seeing progress.”

The retailer said second-quarter earnings per share are expected to be in the range of 95 cents to $1.08. Comp-store sales for Wal-Mart U.S. should advance 1 percent, and Sam’s Club is expected to log a slightly positive comp for the second quarter, without fuel. The company has said it expects sales to be relatively flat this year, in part due to the strong dollar. Earnings are expected to decline between 6 percent and 12 percent.

Globally, on a constant currency basis, e-commerce sales and GMV grew 7 percent and 7.5 percent, respectively. “Growth here is too slow,” McMillon said. “The U.S. number is better than the global number, but neither is as high as we’d like. We’re pleased with our e-commerce operating system and happy to have our new e-commerce fulfillment centers operational. Those are necessary building blocks. We need to win in e-commerce.”

Net sales at Wal-Mart International declined 7.2 percent to $28 billion in the current first quarter from $30.27 billion in the 2016 period. Net sales at Sam’s Club rose 1 percent to $13.06 billion from $13.48 billion.

Consolidated operating income in the first quarter of 2017 declined 7.1 percent, as planned investments in people and technology and currency exchange rate fluctuations impacted results, the company said.

Gross profit increased 60 basis points during the quarter, primarily driven by gross margin improvements in the U.S.

Wal-Mart International had a strong start to the year, with ten of the 11 markets posting positive comp-store sales and nine markets growing comps by more than four percent on a constant-currency basis. Walmex and Canada posted strong sales and market share gains. “China remains a strategic market for our future and is now our fourth-largest international market in terms of sales,” said Brett Biggs, executive vice president and chief financial officer of Wal-Mart Stores Inc.

The highly competitive U.K. environment, with the added wrinkle of food deflation, significantly impacted traffic and comp sales trends at the perennially challenged Asda. “We’re focused on making strategic investments in price, while being diligent in managing our bottom line and cash flow,” Biggs said.

Sam’s Club grew membership income in the first quarter of 20017. “Comp sales for the period were in line with our guidance, but we know we can deliver stronger results,” Biggs said. “Leading in digital is a focus area for Sam’s.”

Wal-Mart U.S. saw strength in general merchandise, driven by solid sales growth in hardlines, home and seasonal, and apparel. Neighborhood market format delivered a comp sales increase of 7 percent.

Inventory declined 3.5 percent in the first quarter, including a 5.7 percent decline in comp stores. “The inventory discipline is driving benefits across the store, such as improved in-stock levels and more efficient processes for our associates,” Biggs said.

Operating expenses increased 11.5 percent over last year, primarily due to previously announced wage increases. “Our store teams were more efficient in managing expenses to more closely align with sales growth, and a milder winter drove lower utility and maintenance expenses,” Biggs said.

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