Walmart spent $2.7 billion fixing a huge weakness

Flickr / Walmart

Walmart shares were up nearly 9% Thursday morning after the retailer posted higher-than-expected quarterly profit and revenue amid a weak overall retail landscape.

The company posted first-quarter earnings per share of 98 cents, versus $1.03 a share last year. Revenue rose to $115.9 billion for the quarter, up from $114.83 billion a year earlier.

In the US, same-store sales rose 1% in the quarter, driven by a 1.5% increase in traffic.

Walmart attributed the gains in part to its investments in labor, which in turn has fixed one of Walmart's biggest weaknesses: customer service.

The company last year committed to investing $2.7 billion over two years in wage increases, scheduling improvements, and employee training.

The move is improving widespread issues in stores, such as empty shelves and cleanliness.

"Associates are feeling a little bit more engaged," Walmart US President Greg Foran told reporters on Thursday.

Employees are  doing a better job at keeping shelves stocked and the stores and parking lots are cleaner, he said.

Flickr / WalmartAs another added bonus, many associates are spending their extra income at stores.

"We are seeing an improvement of associates purchasing in our stores," Foran said.

Customers are noticing the changes.

"Our customers continue to tell us they are happy with the changes we’re making in our stores, as evidenced by our customer experience scores, which rose again this quarter versus last year," said Brett Biggs executive vice president and chief financial officer of Walmart stores, on a call with analysts.

Foran said there's still room for more improvement, however.

"We've still got a long way to go, we've still got plenty of stores that [need improvement]," he said. 

If you work for Walmart and have a story to tell, please email us at hpeterson@businessinsider.com.

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