Walmart continues upswing with 4.3% lift in U.S. sales

BENTONVILLLE, Ark. - Walmart on Thursday reported a 4% lift in first-quarter revenues to $119.4 billion and a 4.3% lift in net sales across Walmart U.S. to $73.3 billion.

 

"As we described in October, we're improving our stores, adding critical capabilities and deepening relationships with customers," Doug McMillon, president and CEO Wal-Mart Stores, told investors Thursday morning. "We are encouraged by the Walmart U.S. comp and believe it’s attributable to real improvement in our store experience," he said. "I'm seeing it myself on store visits and you can see it in the traffic numbers." 

 

While Walmart management was satisfied with the results, the mandate is to maintain that momentum by improving its position against omnichannel. According to the company, e-commerce efforts contributed approximately 20 basis points to the overall comp. "We are focused on building the ecommerce capabilities we need to drive growth to a higher level and deliver the seamless shopping experience for customers they desire," McMillon said. And Walmart is announcing the addition of nine new markets to its grocery pickup service, bringing the total number of markets to nearly 40 by the end of the month. "In addition, in some markets, we'll double the number of stores that offer the service locally in May," McMillon added. "We expect to continue to quickly expand to new markets."

 

Walmart Pay is also gaining traction, McMillon said, and the company expects to complete that rollout by the end of June.

 

Walmart U.S. delivered positive comp sales for the seventh consecutive quarter, up 1%, driven by the sixth consecutive quarter of positive traffic, up 1.5%. Neighborhood Market comp sales increased approximately 7.1%. Net sales were up 4.3% to $73.3 billion for the quarter. 

 

"We are proud of the overall results in the first quarter, and there is momentum in many parts of the business," added Brett Biggs, EVP and CFO, Wal-Mart Stores. "Based on our views of the global operating environment, and assuming currency exchange rates remain at current levels, we expect second quarter fiscal 2017 earnings per share to range between $0.95 and $1.08," he said. "Additionally, we expect comp sales for Walmart U.S. to be about plus 1%, and Sam's Club, without fuel, to be slightly positive for the 13-week period ending July 29, 2016." 

 

At Sam’s Club, net sales, without fuel, grew by 2.9%. Membership income increased by nearly 4%, as Plus member renewals grew by more than 30%, and Plus penetration was near an all-time high.

 

Comp sales, excluding fuel, increased 0.1% in the period as deflation, especially in fresh meat and dairy, continued to be a headwind and negatively impacted comp sales by approximately 50 basis points versus the first quarter of last year, Biggs noted. "E-commerce performed well and contributed 60 basis points to the comp, including sales through Club Pickup, which grew by more than 30%."