Home Walmart Exceeds Q1 Expectations With Help From Home
May 16, 2024

Walmart Exceeds Q1 Expectations With Help From Home

By: Mike Duff

Contributing Editor

The first quarter exceeded Wall Street and company expectations as Walmart pressed lower-pricing initiatives across various categories, including Home.

Net income was $5.1 billion, or 63 cents per diluted share, versus $1.67 billion, or 21 cents per diluted share, in the year-previous quarter. Adjusted for one-time events, Walmart maintained earnings per share at 60 cents versus 49 cents in the year-before quarter.

An analyst consensus estimate published by Yahoo Finance called for earnings per share of 52 cents and revenue of $159.5 billion.

Comparable sales for operations in the United States were up 3.9% without the impact of fuel price volatility, with Walmart U.S. up 3.8% and Sam’s Club up 4.4%, the company stated. Transactions at Walmart U.S. increased by 3.8% year over year with average ticket flat. Transactions at Sam’s Club increased 5.4% year over year with average ticket down 1%. Contributions to comps from e-commerce were about 280 basis points at Walmart U.S. and about 180 basis points at Sam’s Club.

E-commerce sales globally gained 21% led by store pickup orders and marketplace, Walmart indicated.

Net sales were $159.94 billion, while net revenue, including membership fees, was $161.51 billion, versus $151 and $152.3 billion, respectively, in the year-prior quarter. Operating income was $6.84 billion versus $6.24 billion in the year-earlier period, Walmart reported, while adjusted operating income was $7.1 billion versus $6.24 billion.

First quarter net sales at Walmart U.S. were $108.67 billion, up from $103.9 billion year over year, with operating income reaching $5.33 billion from $4.98 billion. Net sales at Sam’s Club were $21.44 billion, up from $20.5 billion year over year, with operating income reaching $615 million from $458 million, Walmart noted.

In a presentation on quarterly results, the company pointed out that Walmart U.S. General Merchandise comp sales increased in the low single digits reflecting softness in entertainment and home due largely to deflation, increased unit volumes in hardlines and home, strength in the marketplace due to positive results in furniture, sporting goods and home, and share gains led by higher-income households. Sam’s Club saw a Home and Apparel comp gain in the low single digits, with softness in seasonal items and furniture partially offset by strength in apparel and auto.

In a conference call, Doug McMillon, Walmart president and CEO, said that the company delivered stronger than expected results in the first quarter and that gains were across the organization, and in real terms, identifying deflation in cited categories as one piece of evidence.

“These are not inflation-driven results,” he said. “Together with our suppliers, we’re making progress lowering prices. Our Rollback count is up, and the  customers are responding to our price leadership.”

He added that strong core performance and growth in new businesses drove gains. Advertising and membership both increased by 24% year over year.

In announcing the first quarter results, McMillon said, “Our team delivered a great quarter. Around the world, our goal is simple, we’re focused on saving our customers both money and time. It’s inspiring to see how our associates are simultaneously executing the fundamentals and innovating to make shopping with us more enjoyable and convenient. We’re people-led and tech-powered, and that combination is propelling our business.”

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