Walmart reported first quarter earnings above Wall Street estimates on Tuesday as the company saw strong grocery sales, strong ecommerce growth and raised its outlook for the year.
Shares rose more than 2% on Tuesday afternoon.
The big box retailer said more shoppers have gone to its stores and website to do stimulus checks and prepare to reconnect if Covid cases drop and vaccination rates go up.
US ecommerce sales rose 37% as consumers returned to more typical patterns. The retailer faced tough comparisons from the year-ago quarter as lodging orders drove customers to stock up on groceries, household items and shop more online.
Brett Biggs, Walmart’s chief financial officer, said in an interview that the company sees “pent-up demand” and expects it to continue. He said customers are still buying items that were popular during the pandemic, like bikes and printers, but have also started buying things like teeth whiteners when they take off their masks.
“You can say that people are slowly coming out,” he said.
The company has raised its outlook for the fiscal year. Walmart US earnings per share and operating income are expected to increase in the high single digits. It reiterated its forecast that Walmart US and Sam’s Club sales in the same business will grow in the low single digits excluding fuel and tobacco.
“Stimulus helped in the first quarter, and that’s why we’ve raised our earnings and sales guidance,” said Biggs. He said the company had also improved its outlook based on developments in the second quarter.
For the first quarter ended April 30, the company reported the following compared to consensus refinitive estimates:
- Earnings per share: $ 1.69 adjusted versus $ 1.21 expected
- Revenue: $ 138.31 billion versus $ 131.97 billion expected
For the quarter, net income rose from $ 3.99 billion, or $ 1.40 per share, to $ 2.73 billion, or 97 cents per share, in the prior year, according to Walmart. Excluding items, the company made $ 1.69 per share. According to Refinitiv, analysts had expected Walmart to make $ 1.21 per share.
Total revenue increased nearly 3% to $ 138.31 billion from $ 134.62 billion last year, and exceeded that figure Wall Street’s expectations of $ 131.97 billion.
Walmart’s sales in the same store in the US rose 6%, above the 0.9% increase expected by analysts surveyed by StreetAccount. The company said those grocery sales got a boost as it gained market share. Transactions were down 3.2%, but average ticket growth was up 9.5%.
Walmart subsidiary Sam’s Club sales in the same store rose 7.2% excluding fuel – more than the 1.2% growth forecast by analysts. The company said warehouse club membership had also hit an all-time high.
Walmart International’s net sales were $ 27.3 billion, down 8.3% year over year, partly due to the company divesting portions of its global business. However, e-commerce sales in this segment rose 49%. The company recently sold Asda, a UK supermarket chain, and a majority stake in Seiyu, a Japanese supermarket chain.
Read the company’s press release here.