Walmart reported blowout Q1 results, boosted not only by record high pickup and delivery as a result of the coronavirus pandemic, but also a 74% increase in online sales, as US consumers scrambled to stockpile products during the pandemic lockdown.
Walmart reported EPS of $1.18, beating expectations of $1.12, on Revenue of $134.622BN, also well above the $132.79BN expected, even as the company withdrew its full-year guidance due to the "significant uncertainty" surrounding the length and intensity of the coronavirus’s impact.
The retailer reported revenue growth of 8.6% in the quarter, the highest since the financial crisis.
Even though total transactions declined by 5.6%, the surge in the average ticket by 16.5% meant that comp sales rose by a whopping 10.0%, smashing expectations of 8.6% and the highest in almost two decades. It was "as a result of the health crisis and related stay-at-home mandates, customers consolidated store shopping trips with larger average baskets and shifted more purchases to eCommerce."
As the company details, while February comp sales grew 3.8%, in mid-March, stock-up trips surged with March comp sales increased 15.4%. Store sales slowed during the first half of April but reaccelerated mid-month as customers spent government stimulus money resulting in a 9.5% April comp sales increase.
E-commerce sales were strong growing 74% and contributed approximately 390 basis points to segment comp sales growth. The company also reported that "food and consumables sales were strong and grocery pickup and delivery reached all-time high sales volumes" and store pickup and delivery, ship to home, ship from store, and marketplace channels were strong throughout the quarter.
Sam’s Club Q1 US comparable sales ex-gas were also impressive, rising +12%, and smashing the estimate of +7.8%. According to a breakdown of the key performance highlights, in addition to the record stockpiling of paper " Broad-based strength, including paper goods, laundry & home care and health & beauty", the company saw a surge in spam sales as "canned protein, pasta and coffee/breakfast performed well."
Some other observations from the report, via Bloomberg:
The CFO said that "The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence."
Finally, the company said it generated a whopping $5.3BN in free cash flow in the quarter, with operating cash flow doubling to $7BN compared to year ago, and while dividends were unchanged from a year ago, stock buybacks tumbled by 66%
On net, however, the quarter blew out expectations as can be seen in the stock price, which jumped over 3% from Monday’s close and is set to surpass the all-time high price set on April 16 of $132.33.
Our IP Address: