Walmart reports strong revenue growth of 6.0% with operating income growing faster at 9.6%; adjusted operating income up 13.7%
Walmart reported a strong revenue growth of 6.0% in Q1, reaching $161.5 billion. Operating income surged by 9.6%, with adjusted operating income up 13.7%. The company's global eCommerce sales grew by 21%, thanks to store-fulfilled pickup and delivery services, and their marketplace. Walmart's global advertising business saw a 24% increase, including a 26% rise in the U.S. Walmart Connect segment. The company achieved GAAP EPS of $0.63 and adjusted EPS of $0.60. Notably, Walmart's global inventory decreased by 2.7%, ensuring healthy in-stock levels. For Q2, Walmart issued updated guidance and revised its outlook for FY25.
- Revenue grew by 6.0%, reaching $161.5 billion.
- Operating income increased by 9.6%, showing strong operational efficiency.
- Adjusted operating income rose by 13.7%, indicating robust underlying business performance.
- Global eCommerce sales surged by 21%, driven by store-fulfilled pickup and delivery and marketplace operations.
- Global advertising business grew by 24%, including a 26% increase in Walmart Connect U.S.
- Global inventory down by 2.7%, ensuring healthy in-stock levels.
- Achieved GAAP EPS of $0.63 and adjusted EPS of $0.60, showing strong earnings performance.
- Adjusted EPS lower than GAAP EPS, indicating adjustments may negatively impact perceived earnings quality.
Insights
Walmart's 6% increase in revenue and 9.6% growth in operating income are positive indicators of the company's ability to achieve cost efficiencies and drive profitability. The adjusted operating income's growth of 13.7% suggests even stronger underlying performance when excluding one-time items. These figures are particularly notable given the current economic uncertainty and inflationary pressures.
It's also important to note the 0.6 percentage point improvement in gross margin, which reflects operational efficiency and possibly better supply chain management. The decline in global inventory by 2.7% signals effective inventory management, reducing the risk of overstock and markdowns, while maintaining healthy in-stock levels.
For retail investors, the 21% increase in global eCommerce sales is significant, showing Walmart's successful adaptation to the digital retail landscape. This segment's growth, particularly in store-fulfilled pickup and delivery services, highlights Walmart's strength in omnichannel retailing, which can be a key differentiator against competitors.
The 24% growth in Walmart's global advertising business, including a 26% increase for Walmart Connect in the U.S., indicates the company's expanding revenue streams beyond traditional retail. This growth in the advertising segment is likely driven by Walmart's ability to leverage its vast customer data to offer targeted advertising, positioning itself as a significant player in the digital advertising market.
Moreover, Walmart's strong performance in eCommerce, with a 21% growth, underscores a continued shift in consumer behavior towards online and hybrid shopping formats. The company's capability to integrate online and physical store experiences enhances customer convenience and loyalty, important in today's competitive retail environment.
Investors should also consider the strategic implications of Walmart's guidance for Q2 and the updated outlook for FY25. These forward-looking statements suggest management's confidence in sustaining growth momentum, which can positively influence investor sentiment and stock performance in the near term.
eCommerce up
GAAP EPS of
Company issues guidance for Q2; updates outlook for FY25
First Quarter Highlights:
-
Consolidated revenue of
$161.5 billion 6.0% , or5.8% (in constant currency), 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
$0.6 billion 9.6% ; adjusted operating income up13.7% , due to higher gross margins and growth in membership income -
Global eCommerce sales grew
21% , led by store fulfilled pickup & delivery and marketplace -
Global advertising business grew
24% , including26% for Walmart Connect in theU.S. -
Adjusted EPS of
$0.60 $0.05 $0.02 -
Global inventory down
2.7% , including a decrease of4.2% for WalmartU.S. ; in-stock levels healthy
The company will hold a live conference call with the Investment Community at 7 a.m. CST Thursday, May 16, 2024, to discuss the company’s first quarter earnings results for fiscal year 2025. The event will be webcast live and is accessible by visiting https://corporate.walmart.com/news/events and selecting the First Quarter Earnings Release event. The webcast will be archived and available on the company website.
About Walmart
Walmart Inc. (NYSE: WMT) is a people-led, tech-powered omnichannel retailer helping people save money and live better - anytime and anywhere - in stores, online, and through their mobile devices. Each week, approximately 255 million customers and members visit approximately 10,500 stores and numerous eCommerce websites in 19 countries. With fiscal year 2023 revenue of
View source version on businesswire.com: https://www.businesswire.com/news/home/20240515384336/en/
Investor Relations Contacts
Steph Wissink
Senior Vice President, Investor Relations
ir@walmart.com
Kary Brunner
Sr. Director, Investor Relations
Media Relations Contact
Molly Blakeman
Group Director, Global Communications
800-331-0085
Source: Walmart Inc.
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