Walmart sales up 7.3%; sounds warning about fuel costs
Walmart Inc. reported strong revenue growth for its first quarter, driven in part by soaring e-commerce sales and continued growth in its advertising business.
But the nation’s largest retailer issued soft second quarter and full-year guidance amid soaring gas prices. In an interview with CNBC, Walmart CFO John David Rainey warned that high gas prices could take a toll on shoppers going forward.
“I think higher tax returns muted some of the pressure related to higher fuel prices and as we’re in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices,” he said. “It’s something that we’re keeping a close eye on, but that expectation is built into our guidance for the second quarter.”
On the company's earnings call, Rainey said the number of gallons of gasoline that the typical customer bought per visit fell below 10 for the first time since 2022.
“That’s an indication of stress,” he told analysts.
Rainey said that Walmart during the quarter absorbed approximately $175 million or about 250 basis points of operating income growth from higher-than-planned fuel costs in its global distribution and fulfillment operations.
"We're always focused on providing low prices for customers," he said. "EDLP is core to who we are. That said, these are real impacts to cost of goods sold for us and our suppliers. If the current elevated cost environment persists, we'd expect somewhat higher retail price inflation in Q2 and the second half of the year."
Walmart’s first-quarter net income increased 18% to $5.33 billion, or $0.67 per share, for the quarter ended April 30, compared with $4.49 billion, or $0.56 per share, in the year-ago period. Adjusted earnings were $0.66 per share, which was in line with analysts estimates. Adjusted operating income grew 5.1%.
First Quarter Revenue
Total revenue rose 7.3% to $177.75 billion, ahead of analysts estimates of $174.98 billion. Walmart’s U.S. net sales rose 4.5%; international net sales increased 18%.
Global e-commerce sales soared 26%, led by store-fulfilled pickup & delivery and marketplace. Revenue from Walmart’s U.S. advertising business revenue jumped 37%.
[READ MORE: Walmart's annual report shows e-commerce boom]
Same-store sales rose 4.1%. Transaction were up 3% and the value of the average transaction increased 1.1%.
Consolidated membership fee revenue rose over 17%, with U.S. Walmart+ membership fee revenue hitting a new fiscal first quarter high, and Sam's Club U.S. membership revenue up 5.6%.
"Our results reflect our continued focus on delivering across the enterprise — better shopping experiences, a broader assortment, and faster delivery,” said Walmart president and CEO John Furner, who took the reins of the company in February “Our teams are adopting innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions. It’s a disciplined approach that's helping us grow the business and strengthen returns."
