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Walmart said that, during Q1, the company saw increased store traffic, gained market share in grocery and improved in-stock levels.

Walmart keeps up sales momentum in first quarter

CEO Doug McMillon cites gains in grocery market share, e-commerce

Getting a lift from its omnichannel positioning, Walmart posted robust U.S. sales gains in its fiscal 2022 first quarter despite tough comparisons to last year’s surge in consumer stockpiling purchases sparked by the outbreak of COVID-19.

For the quarter ended April 30, Walmart’s net sales totaled $137.16 billion, up 2.6% from $133.67 billion a year earlier, the Bentonville, Ark.-based retail giant said Tuesday. In constant currency, net sales were up 1.9% to $136.25 billion.

At the bottom line, Walmart topped Wall Street’s per-share forecast in the first quarter. Net income attributable to Walmart came in at $2.73 billion, or 97 cents per diluted share, compared with $3.99 billion, or $1.40 per share, a year ago. On an adjusted basis, diluted net earnings per share (EPS) were $1.69, excluding a net impact of 74 cents from unrealized and realized gains/losses on equity investments and 15 cents from an incremental loss on sale of operations in the United Kingdom and in Japan, Walmart said.

Analysts, on average, had projected adjusted EPS of $1.21, with estimates ranging from $98 cents to $1.28, according to Refinitiv.

“Our results for the first quarter were strong. We’re pleased with our sales momentum and adjusted EPS growth of 43% versus last year. We had strong performance in all three segments. As the pandemic continues, it’s impacting the countries where we operate in different ways, so our teams are adapting to overcome the challenges and deliver the strong results we’re sharing today,” Walmart President and CEO Doug McMillon told analysts in a conference call on Tuesday.

“2021 brings its own unique challenges and uncertainty, but overall my optimism is higher than it was at the beginning of the year for several reasons. In the U.S., economic stimulus is clearly having an impact, but we also see encouraging signs that our customers want to get out and shop,” he explained. “Our execution is improving despite the hurdles presented by the pandemic. The second half will likely have more uncertainty than a normal year, but we like our position. Our stores are getting stronger, and our e-commerce capabilities are expanding as we continue to grow. Customers will decide how and when they want to shop, and they’ll find us ready, whether they want to shop in store, pick up an order or have it delivered.

“Key elements of our strategy are coming together nicely,” McMillon added. “We saw an acceleration of traffic in our stores, gained market share in grocery, improved in-stock levels and grew e-commerce sales globally by 43% in constant currency, excluding recent divestitures. Global e-commerce penetration now represents over 12% of total company sales, an increase of 340 basis points over last year. Looking ahead, we'll navigate the supply chain challenges and inflationary pressures, whether that’s in cost of goods or wages. We’ll monitor our price gaps and adjust as appropriate, with both customers and shareholders in mind.”


The omnichannel strategy 'continues to resonate" for Walmart, according to CFO Brett Biggs.


At Walmart U.S., first-quarter net sales climbed 5% to $93.17 billion from $88.74 billion. Comparable sales rose 6.2% year over year and were up 6% excluding fuel. Although the number of transactions dipped 3.2%, the average ticket size grew 9.5%. Those gains built on increases of 10.5% in net sales, 9.9% in comp sales (10% excluding fuel) and 16.5% in ticket size in the fiscal 2021 first quarter, which saw transactions slip by 5.6%.

E-commerce sales for Walmart U.S., meanwhile, advanced 37% for the fiscal 2022 first quarter and contributed about 360 basis points to comp sales. Walmart noted that online sales for the quarter reflected strong results across all channels, and U.S. e-commerce sales have more than doubled over the last two years. In the 2021 quarter, U.S. e-commerce sales had risen 74% at the top line and 3.9% on a comparable basis.

“Walmart U.S. had another strong quarter, aided by stimulus spending and underlying improvements in the grocery business, as well as strength in reopening categories such as travel, celebration and personal care,” Chief Financial Officer Brett Biggs said in the call. “We’re particularly encouraged by the improving trends in store transactions, which turned solidly positive in April for the first time in a year. We also saw strong market-share gains in grocery, according to Nielsen, and continued strength in e-commerce.”

In a two-year stack, comp sales for Walmart U.S. were up 16% in the first quarter, according to Biggs.

“The omni-strategy continues to resonate, as customers utilize all the shopping options we offer, and we continue to expand pickup and delivery capacity from stores,” he said. “Customer trip consolidation led to a nearly 10% increase in average basket size, with 3% fewer transactions. Strong sales trends were led by apparel, home and lawn, and garden. Grocery sales declined against a uniquely tough comparison, but comps were up low double digits on a two-year stack basis, including mid-teens growth in food categories held by strong price positioning, improving in-stocks and expanded store hours relative to last year.”

First-quarter 2022 net sales at Sam’s Club jumped 10.1% to $16.69 billion from $15.16 billion a year earlier. Comp sales gained 11.1% and were up 7.2% excluding gasoline. The average ticket size grew 4.9%, while transaction count edged up 2.2%. Sam’s e-commerce sales gained 47% at the top line and 3.4% on a comparable basis. Walmart said reduced tobacco sales negatively affected comp sales by about 340 basis points. Sam’s membership income rose 12.7%, and total member count reached an all-time high, the company said.

A year ago, Sam’s posted increases of 9.6% in net sales, 8.5% in comp sales, (12% excluding gas), 11.9% in transactions and 0.1% in average ticket size, while e-commerce sales rose 40% overall and 1.7% on a comp basis.

“The momentum at Sam’s Club continued in the first quarter with comp sales growth of 10.6%, excluding fuel and tobacco due in part to stimulus spending. On a two-year stack basis comps were up nearly 27%,” Biggs said. “Comps benefited from both increased ticket and transactions. Strength was broad-based across categories, with home and apparel leading the way. E-commerce sales were strong, increasing 47%, led by strength in curbside pickup at the club.”


Strong curbside pickup sales at Sam's Club helped fuel 47% Q1 e-commerce sales growth at the chain.

Net sales at Walmart International decreased 8.3% to $27.3 billion in the 2022 first quarter from $29.77 billion a year ago. In constant currency, net sales were down 11.4% to $26.39 billion. The results compare with a 3.4% gain in net sales (+7.8% in constant currency) in the 2021 quarter.

Looking ahead, Walmart projects consolidated fiscal 20222 net sales growth to decline in the low single digits (constant currency), and Walmart U.S./Sam’s Club comp-sales to grow in the low single-digits (excluding fuel and tobacco). For Walmart International, the company forecasts a net sales decline of 20% to 25% (constant currency) due to divestitures. Adjusted EPS is expected to rise by high single digits, with double-digit growth excluding divestitures.

“Our typical practical is to not update guidance until the second-quarter release, but we’re in an unusual period where Q1 stimulus led to meaningful sales and profit tailwinds that weren’t contemplated when we provided guidance in February,” Biggs said. “The guidance discussed here assumes that COVID conditions continue to improve, and there won’t be significant additional government stimulus packages for the remainder of the year. We now anticipate higher full-year enterprise sales growth than originally projected, primarily due to the strong Q1 performance in our initial forecast for Q2.”

Analysts’ consensus fiscal 2022 forecast is for adjusted EPS of $5.41, with projections running from $5.25 to $5.88, according to Refinitiv.

As of April 30, Walmart 10,526 stores overall, including 5,342 in the U.S. (4,743 Walmart U.S. and 599 Sam’s Club stores) and 5,184 Walmart International stores.

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