Walmart Inc. Quarterly Report for Q1 Ended Apr 30, 2021

Summary

Walmart Inc. reported its first-quarter fiscal year 2022 results with total revenues of $138.3 billion, a modest increase of 2.7% year-over-year. This growth was primarily driven by strong comparable sales in the Walmart U.S. and Sam's Club segments, which benefited from U.S. consumer stimulus spending and increased average ticket sizes. However, the overall revenue growth was partially offset by the divestiture of international operations in the U.K. (Asda) and Japan (Seiyu). Net income for the quarter saw a significant decrease to $2.73 billion from $3.99 billion in the prior year, translating to diluted earnings per share of $0.97 compared to $1.40. This decline was largely attributable to a substantial $2.5 billion 'Other (gains) and losses' charge, which included net losses from equity investments and incremental losses from the aforementioned divestitures. Despite the earnings decline, the company demonstrated operational resilience with stable operating expense ratios and an increase in operating income, particularly within the Walmart U.S. segment.

Key Highlights

• 1Total revenues increased 2.7% to $138.3 billion, driven by U.S. comparable sales growth.
• 2Walmart U.S. comparable sales grew 5.3%, benefiting from stimulus spending and larger basket sizes.
• 3Sam's Club comparable sales surged 10.1%, also boosted by stimulus and increased average ticket.
• 4Net income attributable to Walmart decreased to $2.73 billion ($0.97 diluted EPS) from $3.99 billion ($1.40 diluted EPS) in the prior year.
• 5A significant 'Other (gains) and losses' of $2.5 billion negatively impacted net income, primarily due to equity investment fair value changes and divestiture losses.
• 6The company completed the divestitures of its U.K. (Asda) and Japan (Seiyu) operations during the quarter.
• 7Capital expenditures increased to $2.21 billion, with a focus on supply chain, customer-facing initiatives, technology, and store remodels.

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