10-QPeriod: Q1 FY2022

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

Filed June 4, 2021For Securities:WMT

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.

Financial Highlights

48 data points
Beta

Revenue

$137.16B

24.7% Gross Margin

Net Income

$2.73B

2.0% Net Margin

EPS (Diluted)

$0.32

Total Assets

$236.58B

Cash & Equivalents

$22.85B

Free Cash Flow

$644.00M

Financial Statements
Beta
Revenue$137.16B
Cost of Revenue$103.27B
Gross Profit$33.89B
SG&A Expenses$28.13B
Operating Income$6.91B
Interest Expense$481.00M
Net Income$2.73B
EPS (Basic)$0.32
EPS (Diluted)$0.32
Shares Outstanding (Basic)8.45B
Shares Outstanding (Diluted)8.49B

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.

Frequently Asked Questions

Walmart reported total revenues of $138.3 billion for the three months ended April 30, 2021, an increase of 2.7% compared to the same period in the prior year. This growth was primarily driven by strong comparable sales in the U.S. segments, partially offset by divestitures of international operations.

The primary reason for the decrease in net income was a significant charge of $2.5 billion categorized under 'Other (gains) and losses'. This charge included net losses from changes in the fair value of equity investments and incremental losses recognized upon the closing of the divestitures of its U.K. and Japan operations.

The divestitures of the U.K. (Asda) and Japan (Seiyu) operations resulted in a $4.2 billion decrease in net sales for the Walmart International segment and contributed to incremental pre-tax losses of $0.4 billion recorded in 'Other gains and losses'.

Walmart allocated $2.21 billion to capital expenditures in the quarter, an increase from the prior year. The company is prioritizing investments in supply chain, customer-facing initiatives, technology, and store remodels, while reducing investment in new store openings.