Walmart reported better-than-expected earnings and revenue for the first quarter, thanks to significant e-commerce gains and the success of newer businesses like advertising. The retailer raised its full-year guidance and saw a 6% increase in revenue compared to the year-ago period. The company’s net income also jumped to $5.10 billion. Walmart’s grocery business thrived due to the price difference between cooking at home and dining out, as well as the convenience offered by the retailer, which saw growth in its delivery business surpassing store pickup.
In-store sales for Walmart U.S. and Sam’s Club showed positive growth, with a 3.8% increase in same-store sales at Walmart U.S., and a 4.4% rise at Sam’s Club, excluding fuel. E-commerce sales for Walmart U.S. also grew by 22% year over year, driven by store pickup and delivery services, as well as the third-party marketplace. However, despite these positive numbers, CFO John David Rainey noted that customers are still feeling the impact of inflation, with a focus on spending more on essentials like food and health-related items.
Walmart’s success in attracting customers to both online and physical stores was highlighted by an increase in overall store visits, although spending remained relatively stable compared to the previous year. CEO Doug McMillon emphasized the retailer’s efforts to expand its online business, especially in non-grocery categories like apparel and home goods. Walmart has been remodeling stores and introducing new private-label brands to appeal to younger and more affluent households, including partnerships with fashion designers and celebrities for exclusive collections.
Newer businesses like advertising and the membership program Walmart+ have helped boost the company’s profit, with operating income growth outpacing sales growth. The company’s advertising segment grew by 24% during the quarter, with a significant increase in third-party marketplace sellers and items available. Walmart has also invested in expanding its marketplace platform to compete with rivals like Amazon, offering fulfillment and advertisement services to sellers. Rainey mentioned that a third of Walmart’s operating income gains came from these newer businesses.
Despite recent layoffs and restructuring efforts, Walmart continues to invest in areas like advertising and online expansion. The retailer recently announced the acquisition of smart TV maker Vizio in a $2.3 billion deal, and has been focusing on initiatives to drive growth in its e-commerce business. The company’s stock price reached an all-time high on Thursday, reflecting investor confidence in Walmart’s performance and future prospects. With a market cap of over $500 billion, Walmart remains a key player in the retail industry and a major indicator of the overall health of the U.S. economy.
