Walmart, Inc. reported first-quarter consolidated revenue of $152.3 billion, up 7.6 percent, or 7.7 percent in constant-currency, compared to the year-ago comparable quarter. The company reportedly saw strong comp sales globally.
The company’s consolidated gross margin rate declined 18 basis points 23.7 percent of sales on a mix of sales, but was offset to the upside by 58 basis points reduction in operating expenses as a percentage of net sales.
Resulting consolidated operating income was up 17.3 percent to $6.2 billion for the quarter, with the operating margin up 34 bps for the period. Operating expense leverage, along with progress from the company’s connected value streams, including advertising, helped deliver operating margin expansion.
GAAP EPS was down for the period to 62 cents a share from 74 cents a share in the year-ago Q1 period, while non-GAAP EPS was up 13 percent to $1.47 a share, compared to $1.30 a share in the year-ago period.
Walmart U.S. posted 7.4 percent comp store sales growth (ex-fuel), as its omnichannel model continues to resonate with customers and members. Net sales in the Walmart U.S. business were up 7.2 percent to $103.9 billion. Walmart’s U.S. operating expense leverage of 65 basis points, partially offset by a 41 bps decline in gross profit rate.
- E-commerce was up 27 percent, led by pickup & delivery;
- Transactions were up 2.9 percent for the period;
- Average ticket was up 4.4 percent in the quarter;
- Walmart Connect advertising grew 40 percent; and
- Inventory declined 9 percent at quarter-end with higher in-stock levels.
Walmart International net sales increased 12.0 percent in Q1 to $26.6 billion, and up 12.9 percent in constant-currency, led by China, Walmex, and Flipkart. Walmart International’s operating income increased 50.8 percent (+41.5 percent in constant-currency terms) to $1.2 billion with strength across markets.
- E-commerce sales increased by 25 percent, with strength in store-fulfilled and advertising.
- Gross margin expanded 12 basis points over last year.
- Operating expense leverage of 111 bps on strong growth in net sales and operating discipline.
Sam’s Club U.S. net sales increased 4.5 percent to $20.5 billion in the first quarter, with strong comp sales, led by food and consumables, and positive unit growth overall. Ex-fuel, net sales grew 7.4 percent to $17.8 billion. Comp sales (ex-fuel) rose 7.0 percent for the period. Operating income dipped 0.4 percent to approximately $0.5 billion.
- E-commerce increased by 19 percent, led by curbside delivery;
- Transactions grew 2.9 percent for the period;
- Average ticket was up 4.0 percent in Q1;
- Strong growth in membership income, up 6.3 percent, with the largest quarterly member sign-up to date;
- Membership count and Plus penetration reached all-time highs in the quarter; and
- Active advertisers on its Member Access Platform (MAP) have grown more than 50 percent year-over-year.
Looking ahead, Walmart sees net sales increasing by approximately 4.0 percent in the second quarter in constant-currency terms. Consolidated operating income is forecast to decline approximately 2.0 percent in constant-currency terms. Adjusted EPS is seen in the range of $1.63 to $1.68 per share.
The company’s fiscal year guidance calls for net sales of $605.9 billion, adjusted operating income of $24.6 billion and adjusted EPS of $6.29 a share.
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