Walmart reports Q1 revenue growth

Walmart announced first quarter results with strong growth in revenue and operating income. The retailer said that globallly, its e-commerce penetration is higher across all markets led by store-fulfilled pickup & delivery and marketplace. Walmart U.S. comp sales were up 3.8%.

“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,” said Doug McMillon, president and CEO of Walmart.

[Read more: Pharmacy Innovator of the Year 2021: Walmart connects with communities]

First Quarter Highlights:

• Consolidated revenue of $161.5 billion, up 6%, or 5.8% (cc) , including a benefit of ~1% from an additional selling day.
• Consolidated gross margin rate up 42bps due to improvements across segments, led by Walmart U.S.
• Consolidated operating income up $.6 billion, or 9.6%; adjusted operating income up 13.7%, due to higher gross margins and growth in membership income. 
• Global e-commerce sales grew 21%, led by store fulfilled pickup & delivery and marketplace.
• Global advertising business grew 24%, including 26% for Walmart Connect in the U.S.
• Adjusted EPS of 60 cents excludes the effect, net of tax, from a net gain of 5 cents on equity and other investments and business reorganization charges of 2 cents.
• Operating cash flow of $4.2 billion, a decrease of $0.4 billion.
• Free cash flow of negative $.4 billion , a decrease of $.6 billion.
• Inventory of $55.4 billion, a decrease of $1.6 billion.

Walmart U.S.:

• Sales reflected strength in transaction counts and unit volumes; like-for-like inflation was slightly positive.
• Value-convenience proposition is resonating; share gains are primarily driven by upper-income households.
• Growth in e-commerce of 22%, led by store-fulfilled pickup & delivery and marketplace.
• Walmart Connect advertising sales grew 26%; strong growth in advertiser counts, including marketplace sellers.
• Gross profit rate increased 46 bps; membership income increased; operating expense deleveraged 48 bps.
• Inventory declined 4.2% with sustained strong sales and higher in-stock levels.

Walmart International:

• Growth in net sales cc of 10.7% led by Walmex, China and Flipkart.
• E-commerce sales are up 19%, led by store-fulfilled pickup & delivery and marketplace penetration across markets.
• Advertising business grew 27%, led by Flipkart and Walmex.
• Strength in food and consumables as well as improved growth in general merchandise.
• Gross profit rate increased 32bps due to improved e-commerce margins and growth in higher-margin services.
• Operating income cc up 27.2% with strength across markets and benefiting from lower losses in e-commerce. 

Sam’s Club U.S.:

• Solid comp sales, led by food and consumables as well as increases in transactions and unit volumes.
• Gained dollar and unit market share in grocery.
• Growth in e-commerce sales of 18% led by club-fulfilled curbside and delivery.
• Strong growth in membership income, up 13.3%, with record total membership and penetration at quarter end.
• Gross profit rate increased by 58 bps; operating expense deleverage 17 bps.
• Inventory declined 4.9% with sustained strong sales and higher in-stock levels.
• Walmart issued guidance for the second quarter and expects net sales to increase 3.5% to 4.5% and operating income to grow 3% to 4.5%, in constant currency. 

The company now expects to be at the high end or slightly above its previous guidance (cc) for net sales growth of 3% to 4% and operating income growth of 4% to 6% for FY25.