A first-quarter same-store sales increase of 6%, aided by federal stimulus payments and the continued strength of digitally enabled sales, has enabled Walmart to blow past analysts’ profit forecasts.
Walmart said that sales at its U.S. stores division increased 5% to $93.1 billion, while operating profit surged 26.8% to $5.4 billion. Traffic to stores declined 3.2%, transaction sizes increased 9.5%, and e-commerce growth, which includes digitally enabled sales fulfilled by stores, increased 37%. The company also noted that it gained market share.
“This was a strong quarter,” said Walmart CEO Doug McMillon. “Every segment performed well, and we’re encouraged by traffic and grocery market share trends. Our optimism is higher than it was at the beginning of the year. In the U.S., customers clearly want to get out and shop. We have a strong position as our store environment improves and e-commerce continues to grow. Stimulus in the U.S. had an impact, and the second half has more uncertainty than a typical year. We anticipate continued pent-up demand throughout 2021.”
Walmart’s adjusted earnings per share for the quarter of $1.69 blew past the prior year figure of $1.18 and analysts’ estimate of $1.22.
Walmart’s Sam’s Club division also performed well, posting a 7.2% comp increase excluding fuel, a figure that would have been much higher were it not for a 340-basis-point negative impact due to reduced tobacco sales. Total sales increased 10.1% to $16.7 billion, with the gain balanced between 2.2% growth in total transactions and 4.9% growth in transaction size. Most notably, Sam’s Club said that its membership income increased 12.7%, a figure that bodes well for future sales growth, as the division’s total member count is now at an all-time high.
Bentonville, Arkansas-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer’s list of the top food and consumables retailers in North America, while Walmart-owned Sam’s Club ranks No. 9 on the list.