10-QPeriod: Q1 FY2024

Walmart Inc. Quarterly Report for Q1 Ended Apr 30, 2023

Filed June 2, 2023For Securities:WMT

Summary

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 billion, 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 billion 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.

Financial Highlights

49 data points
Beta

Revenue

$151.00B

23.7% Gross Margin

Net Income

$1.67B

1.1% Net Margin

EPS (Diluted)

$0.21

Total Assets

$245.05B

Cash & Equivalents

$10.71B

Free Cash Flow

$204.00M

Financial Statements
Beta
Revenue$151.00B
Cost of Revenue$115.28B
Gross Profit$35.72B
SG&A Expenses$30.78B
Operating Income$6.24B
Interest Expense$568.00M
Net Income$1.67B
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)8.08B
Shares Outstanding (Diluted)8.11B

Key Highlights

  • 1Total revenues increased by 7.6% to $152.3 billion for the three months ended April 30, 2023.
  • 2Operating 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.
  • 3Walmart U.S. comparable sales increased by 7.5%, driven by strong food sales and inflation impacts, contributing significantly to overall revenue growth.
  • 4Sam's Club comparable sales saw a 4.6% increase, with membership and other income growing by 4.7%.
  • 5The 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.
  • 6Diluted net income per common share decreased to $0.62 from $0.74 year-over-year, largely due to the aforementioned investment-related losses.
  • 7Free 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.

Frequently Asked Questions

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.

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.

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.

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.