Walmart beat earnings and revenue expectations last quarter due to major boosts in e-commerce, though shares dipped on weaker-than-expected guidance.
Adjusted earnings per share were US$0.74, up from $0.66 one year ago and above LSEG estimates of $0.73. Revenue rose 5.6% year-over-year to $190.66 billion, passing estimates of $190.43 billion.
“The pace of change in retail is accelerating. It’s exciting. And our financial results show that we’re not only embracing this change, we’re leading it,” said Walmart CEO John Furner, who took over the role on 1 February.
Customer spending remains resilient, Furner said on an earnings call, though “the majority of our share gains came from households making more than $100,000.”
Walmart U.S. net sales increased by 4.6% to $129.2 billion last quarter, with operating income up 6.6%. This was boosted by a 27% rise in e-commerce sales, the company said.
Walmart International sales climbed 11.5% to $35.9 billion, and the segment’s adjusted operating income increased 26.5%. Growth was led by sales in China, and e-commerce sales similarly rose 17%.
Sam’s Club U.S. segment reported 2.9% growth in net sales to reach $23.8 billion.
Total Walmart adjusted operating income increased by 10.5% to $8.6 billion. Inventory rose 2.6% during the quarter, said Furner.
For the next quarter, Walmart projects earnings per share of $0.63-0.65, net sales growth of 3.5-4.5%, and operating income growth of 4.0-6.0%. FactSet estimates had included earnings per share of $0.68 and sales growth of 5.4%.
"Our goal is to outperform this guidance, but we believe it's prudent to start the year with a level of conservatism given the backdrop is still somewhat unstable," said CFO John David Rainey on an earnings call.
The company also announced a $30 billion share buyback and raised its annual dividend from $0.94 per share to $0.99.
Despite Walmart’s growth in e-commerce, this marks the first time Amazon has surpassed it as the company with the largest annual revenue. Amazon reported $716.9 billion in revenue across the fiscal year, compared with $713.2 billion from Walmart.
Walmart (NASDAQ: WMT) shares dropped 1.4% during Thursday's U.S. session, but climbed 0.2% in after-hours trading. Its market capitalisation is $1.01 trillion.
