Walmart Exceeded Wall Street’s Expectations
Walmart’s first-quarter earnings surpassed Wall Street’s expectations on May 18, as Walmart reported strong grocery sales and e-commerce growth. The big-box retailer also raised its outlook for the year.
Shares of Walmart gained more than 3% on early Tuesday in premarket trading.
The company said more shoppers visited its stores and website to spend stimulus checks and to get ready to socialize again as Covid-19 cases decline and vaccination rates rise.
E-commerce sales in the U.S. grew by 37% even as customers started to return to more normal activities. The company’s Chief Financial Officer Brett Biggs stated that Walmart is seeing restrained demand and expects that to continue. He also noted that customers are still buying items that were popular during the pandemic such as bicycles and printers. Customers also began to purchase things like teeth whitener as people want to take off their masks.
Walmart and great results
In the first quarter of the year, net income reached $2.73 billion, or 97 cents per share, from $3.99 billion, or $1.40 per share, a year earlier. Excluding items, it earned $1.69 per share.
Total revenue grew by nearly 3% to $138.31 billion from $134.62 billion a year earlier, surpassing expectations.
Walmart’s same-store sales in the U.S. rose by 6%. The company said those sales benefited from grocery sales, as it gained market share. Transactions dropped by 3.2%, but average ticket growth rose by 9.5%.
Same-store sales of its subsidiary, Sam’s Club, jumped by 7.2% excluding fuel. Walmart said membership at the warehouse club also climbed to an all-time high.
Walmart International’s net sales were $27.3 billion, a decline of 8.3% year over year, partially due to Walmart’s divesting parts of its global business. The big-box retailer’s sales increased by 49% in that segment, nonetheless. The company recently sold Asda, a British supermarket chain, Walmart also sold the majority stake of Seiyu, a Japanese supermarket chain.
Walmart raised its outlook for the fiscal year. The company expects earnings per share and Walmart U.S.’s operating income to increase in the high single-digits. The big-box retailer reiterated its guidance that same-store sales in Walmart U.S. and its subsidiary Sam’s Club will grow in the low single-digits excluding fuel and tobacco. The stimulus helped in Q1 and thanks to great results, the company increased profit and revenue guidance. The company also raised its outlook because of what it’s seen so far in the second quarter.
