01—Abstract
Summary
Summary of the 10-Q filed June 2, 2023. Cited figures are marked; the original filing is the authoritative source.
Walmart Inc. reported its first-quarter fiscal year 2024 results, demonstrating revenue growth driven by strong comparable sales across its U.S. segments.
Total revenues increased by 7.6% to $152.3 billiona, with Net Sales reaching $151.0 billion. The company saw a notable increase in operating income, rising to $6.24 billion from $5.32 billion in the prior year, resulting in an improved operating income margin of 4.1%.
This growth was underpinned by effective cost management, with operating expenses as a percentage of net sales decreasing by 58 basis points. Despite a decrease in consolidated net income to $1.90 billionb from $2.10 billion, largely due to a significant increase in "other (gains) and losses" related to investment fair value changes, the underlying operational performance remains robust.
02—Key points
Key Highlights
- Total revenues increased by 7.6% to $152.3 billion for the three months ended April 30, 2023.
- Operating income grew by 17.3% to $6.24 billion, and operating income as a percentage of net sales improved to 4.1% from 3.8% in the prior year.
- Walmart U.S. comparable sales increased by 7.5%, driven by strong food sales and inflation impacts, contributing significantly to overall revenue growth.
- Sam's Club comparable sales saw a 4.6% increase, with membership and other income growing by 4.7%.
- The company reported a substantial increase in "other (gains) and losses" to $3.0 billion, primarily due to changes in the fair value of investments, which negatively impacted net income.
- Diluted net income per common share decreased to $0.62 from $0.74 year-over-year, largely due to the aforementioned investment-related losses.
- Free cash flow showed a significant improvement, turning positive at $0.2 billion compared to a negative $7.3 billion in the prior year, driven by better inventory management and payment timing.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Walmart Inc. kept $0.01.
- Revenue$151.00B100.0%
- Cost of revenue−$115.28B76.3%
- Gross profit$35.72B23.7%
- Operating costs−$29.48B19.5%
- Operating income$6.24B4.1%
- Interest, other & tax−$4.57B3.0%
- Net income$1.67B1.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed June 2, 2023Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $151.00B$140.29B | +7.6% |
| Cost of Revenue | $115.28B$106.85B | +7.9% |
| Gross Profit | $35.72B$33.44B | +6.8% |
| SG&A Expenses | $30.78B$29.40B | +4.7% |
| Operating Income | $6.24B$5.32B | +17.3% |
| Interest Expense | $568.00M$372.00M | +52.7% |
| Net Income | $1.67B$2.05B | −18.5% |
| EPS (Basic) | $0.21$0.25 | −16.0% |
| EPS (Diluted) | $0.21$0.25 | −14.9% |
| Shares Outstanding (Basic) | 8.08B8.26B | −2.2% |
| Shares Outstanding (Diluted) | 8.11B8.29B | −2.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of Walmart's revenue growth in this quarter?
The primary driver of Walmart's revenue growth was strong comparable sales across its U.S. segments, particularly Walmart U.S. and Sam's Club. This growth was fueled by an increase in average ticket, robust food sales, the impact of inflation on certain merchandise categories, and a rise in transactions.
Why did consolidated net income decrease despite revenue and operating income growth?
Consolidated net income decreased primarily due to a significant increase in 'other (gains) and losses,' which rose to $3.0 billion from $2.0 billion in the prior year. This increase was mainly attributable to unfavorable changes in the fair value of Walmart's equity and other investments, driven by declines in their underlying stock prices.
How is Walmart managing its inventory levels?
Walmart has moderated its inventory purchases, which, along with improved payment timing, contributed to a significant increase in net cash provided by operating activities and a positive free cash flow of $0.2 billion for the quarter, a substantial improvement from the prior year's negative $7.3 billion.
What is the status of the opioid litigation settlement?
Walmart has agreed to a Settlement Framework to resolve substantially all opioid-related lawsuits filed by states, political subdivisions, and Native American tribes. While agreements with all 50 states and other territories are in place, the framework's effectiveness is contingent on sufficient political subdivision participation. As of April 30, 2023, approximately $2.8 billion of the previously accrued $3.3 billion liability remained within accrued liabilities.
06—Continue