Underlining the shift to value and essentials in today’s market, Walmart posted strong results for the first quarter of its 2024 fiscal year, with grocery largely driving its better-than-expected performance. The company – No. 1 on The PG 100, Progressive Grocer’s recently released list of the top food and consumables retailers in North America – is also raising its guidance for the rest of the fiscal year.
According to the Q1 financial report, sales surged in both stores and online, with a particularly strong start in February. Consolidated revenue climbed 7.6% to reach $152.3 billion, with net sales in the United States up 7.2% to reach $103.9 billion. Sales comps in the United States were up a similar 7.4% during the three-month period ending April 30.
Walmart reported strength in grocery and health-and-wellness categories, with softening sales in general merchandise. Private label sales were up, and the shopper base included more higher-income households.
Global online sales were robust, rising 26% in this past quarter, compared with 17% in the fourth quarter of 2022, which included the all-important holiday season. Walmart’s solid digital performance was fueled by gains in pickup and delivery, as well as advertising -- Walmart Connect ads grew nearly 40%.
“We had a strong quarter. Comp sales were strong globally, with e-commerce up. 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,” noted President and CEO Doug McMillon.
To his point, Walmart’s operating income growth came in 17.3% higher during the first quarter than the year-ago period, while operating expenses as a percentage of net sales decreased by 58 basis points. Net income topped $1.63 billion.
As shoppers seek value and Walmart focuses the scale of its business to deliver on that proposition, the company reported that it expects sales to rise 4% during the second quarter and 3.5% for the fiscal year. Earnings are now expected to fall between $6.10 and $6.20 per share, up 15 cents from the prior estimate.
“It’s not our historic practice to always update guidance exiting Q1, and we don’t necessarily want to establish precedent, but we think in this unique environment, it’s important to provide an ongoing framework as our views evolve,” said CFO John David Rainey during the earnings webcast.
Similar to Walmart stores, Sam’s Club warehouses had a good first quarter. Here, too, sales of food and consumables proved crucial and delivered a 4.5% year-over-year lift to reach $20.5 billion. Led by curbside pickup, e-commerce sales increased 19% at Sam’s Club during the opening months of the fiscal year.
In other news, Walmart leaders shared their commitment to building the retailer’s own EV fast-charging network at thousands of U.S. locations. Walmart also provided an update on its store remodels, reporting that 96 refreshes were underway during the first quarter.
Each week, approximately 230 million customers and members visit Walmart’s more than 10,500 stores and numerous e-commerce websites under 46 banners in 24 countries.