Walmart reports strong revenue growth in Q1, raises full-year guidance

Walmart reported revenue growth of 7.6% in Q1; operating income growing faster at 17.3%.
Sandra Levy
Senior Editor

Walmart shared first quarter results, including strong revenue and operating income growth of 7.6% and 17.3%, respectively. Operating expense leverage, along with progress from the company’s connected value streams, including advertising, helped to deliver operating margin expansion.

For the quarter, the Bentonville, Ark.-based retailer reported adjusted earnings per share of $1.47 vs. $1.32 expected.

The big box retailer said it sees strong comp sales globally, including 7.4% for Walmart U.S., as its omnichannel model continues to resonate with customers and members.

“We had a strong quarter. Comp sales were strong globally with e-commerce up 26%. We leveraged expenses, expanded operating margin and grew profit ahead of sales. And a big thank you to our associates, who continue to step up and deliver for customers and members whenever and however they want to be served,” said Doug McMillon, president and CEO of Walmart.

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Walmart’s consolidated revenue rose to $152.3 billion, from $141.57 billion in the year ago period, an increase of 7.6%, or 7.7% in constant currency. The retailer’s consolidated gross margin rate declined 18 basis points on mix of sales.

The company’s consolidated operating expenses as a percentage of net sales was down 58 basis points.

Walmart’s consolidated operating income was up $.9 billion, or 17.3%, operating margin was up 34 bps.

Walmart also reported that its global advertising business grew over 30%.

Walmart U.S. comp sales were up 7.4%; e-commerce jumped 27%, led by pickup & delivery. 

The retailer's operating cash flow was $4.6 billion, an increase of $8.4 billion.

Walmart U.S.:

• Growth in e-commerce of 27%, with strength in pickup & delivery and advertising;

• Walmart Connect advertising grew nearly 40%;

• Gained market share in grocery, including with higher-income households;

• Operating expense leverage of 65 bps, partially offset by 41 bps decline in gross profit rate; and

• Inventory declined 9% with higher in-stock levels.

[Read more: Walmart appoints Latriece Watkins as U.S. chief merchandising officer]

Walmart International:

• Strong growth in net sales cc, led by China, Walmex and Flipkart;

• Growth in e-commerce sales of 25%, with strength in store-fulfilled and advertising;

• Gross margin expanded 12 bps over last year;

• Operating expense leverage of 111 bps on strong growth in net sales and operating discipline; and

• Operating income cc growth of 41.5% with strength across markets.

Sam’s Club U.S.:

• Strong comp sales, led by food and consumables, and positive unit growth overall;

• Growth in eCommerce of 19% led by curbside;

• Strong growth in membership income, up 6.3%, with largest quarterly member sign-up on record;

• Membership count and Plus penetration reached all-time highs in the quarter; and

• Active advertisers on Member Access Platform (MAP) have grown more than 50% year-over-year.

Walmart said it now anticipates consolidated net sales will rise about 3.5% in the fiscal year. It expects adjusted earnings per share for the full year will be between $6.10 and $6.20.

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