Walmart is on a roll lately after surprising the retail world with its fiscal first quarter financial results. Although net income was down, the company had impressive increases in e-commerce sales. The retail behemoth reported a net income of $4.49 billion, or 56 cents per share. That’s down from last year’s third quarter, when they announced $5.10 billion, or 63 cents per share. Even with this drop, Walmart remains a picture of strength when it comes to e-commerce, where growth has regularly been in the double-digit percentage range.
The company’s top line for the quarter jumped nearly 2.5%. It’s a remarkable $165.61 billion—surpassing last year’s $161.51 billion. Walmart’s revenue missed Wall Street’s consensus expectations of $165.84 billion. On a currency neutral basis, this quarter’s revenue performance would have been negatively impacted by a 1% headwind. The challenge stemmed from the Leap Day that fell in the last fiscal year.
In the U.S., Walmart’s e-commerce sales jumped 21%. It’s the 12th straight quarter of double-digit increases in this sector, a remarkable streak to be sure. U.S. global e-commerce sales grew too—by a whopping 22% year-over-year—this wasn’t just a domestic trend. Retail media has continued to lift Walmart Connect, the retailer’s ad division, which jumped 31% from last year in sales. This big growth does not even include the Vizio smart TV business they bought last year.
Walmart’s comparable sales showed robust growth, with a 4.5% increase for Walmart U.S. and an impressive 6.7% for Sam’s Club, excluding fuel. These numbers show that in an uncertain economic climate, customers still trust and continue to shop at Walmart stores and online.
Despite the fluctuations in net income and revenue, Walmart maintained its full-year forecast, projecting sales growth of 3% to 4% for the fiscal year. The firm projects adjusted earnings in a range of $2.50-$2.60/share.
Even one of the world’s largest retailers, Walmart, through its Chief Financial Officer, John David Rainey, raised alarm over price increases caused by tariffs. “We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he stated. Alas, he told the story much better than I can retell it. It makes it difficult for the retailer, supplier, and consumer.
“It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.” – John David Rainey
Despite these challenges, Walmart’s shares have increased by about 7% this year, reflecting investor confidence in the company’s long-term strategy and performance.