The American and global leader in sales is becoming more and more of a front runner. Walmart’s strict pricing policy benefits the company against the backdrop of high inflation. The sales not only exceeded the forecasts of the analysts, but also of the company itself. In the first quarter of its fiscal year (from February to April), the sales of the American giant grew by 7.6%, which not only reflects the appeal of its hypermarkets, but also is due to online sales, which soared by 26%. The group has raised its forecast for the full year.
When it presented its 2022 closing results, the company said it expects revenue to grow 4.5% to 5% in the first quarter of the year, but full-year growth will come in at 2.5%. -3%. After the target for the first quarter was clearly exceeded, sales growth of 4% is now forecast for the current quarter and 3.5% for the full year. Based on what was observed at the beginning of the year, this is a conservative calculation.
The company invoiced $152,301 million (about €141,000 million at the current exchange rate) in the first quarter, representing growth of 7.6%, according to results reported to the Securities and Exchange Commission (SEC). Operating income increased 17.3% to $6,240 million. However, consolidated attributable net income fell 18.5% to $1,673 million.
Walmart noted last year that it attracts higher-income consumers who flock to its competitive prices amid high inflation. The company also focuses most of its business on groceries, which have risen in price but sales have not declined as much as other commodity groups. This has protected its billing even though groceries are showing lower margins.
Gross margin increases to 23.7% from 23.8%, a minimal decline as the impact of different product mix is partially offset by supply chain normalization and lower freight costs, analysts said. The decline in earnings isn’t so much due to those lower gross margins as it is to the increase in interest charges and extraordinary results. According to the company, adjusted earnings per share excluding extraordinary investment losses rose 13%.
“We had a good quarter,” Walmart chairman and CEO Doug McMillon said in a statement. “Comparable sales were strong globally and e-commerce was up 26%. We reduced expenses, increased operating margin and increased profit [operativos] above sales,” he added. Walmart ended last year with sales of $611,289 million after growing 6.7%, so it’s accelerating its growth and not slowing it down as expected.
Much of the acceleration in growth can be attributed to the development of e-commerce sales, which increased by 26% and contributed around 2.7 percentage points to the growth of the group. Walmart is reclaiming some of the ground that Amazon took from it.
Walmart’s strength contrasts with the development of other retail giants. Home Depot, which focuses on home improvement and home products, expects its sales to fall for the first time since 2009, the year after the financial crisis hit, the company announced this week. Revenue fell 4.2% to $37,257 million in the first quarter of the year.
Target, in turn, announced this week that its revenue for the first quarter of this year rose just 0.5% to $24,498 million, while comparable revenue was flat. The company combines grocery with apparel, accessories and home, categories where consumers have less increased or reduced spending.
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