Walmart gets Q1 boost from e-commerce

Walmart’s e-commerce sales surged during the first quarter and the company boosted its financial forecast for the year as the retail giant continues to gain market share in grocery, the company said Thursday.

For the quarter ended April 28, Walmart reported consolidated revenue of $152.3 billion, up 7.6% (7.7% in constant currency). Walmart’s U.S. same-store sales grew 7.4% (excluding fuel), though the retailer’s gross margin rate fell 18 basis points due to a sales mix that leaned heavily on lower-margin grocery items. Operating income increased 17.3%, up $0.9 billion, to $5 billion.

Bentonville, Arkansas-based Walmart reported a 360-basis point shift away from general merchandise toward grocery and health and wellness items. Sales of food and consumables rose in the “low-double digits” during the period, CFO John David Rainey told analysts.

“Prices remain high, and consumers remain cautious with their spend,” Rainey said.

Led by pickup and delivery, Walmart’s e-commerce sales jumped 27% during the first quarter, a significant increase from the 17% growth seen during the fourth quarter.

The retailer’s advertising business, Walmart Connect, grew nearly 40%.

Sales at Walmart’s member-based warehouse banner Sam’s Club were also led by grocery, with a 19% increase in e-commerce sales—driven by curbside pickup. Sam’s Club reported same-store sales, excluding fuel, of 7% during the first quarter, led by a 4% jump in average ticket. Sam’s Club also reported a 6.3% increase in membership income, the largest quarterly member sign-up ever.

Walmart noted last year that it was seeing the majority of its grocery share gain from households making more than $100,000—a trend that endures as all shoppers seek value, Rainey said.

For the second quarter, Walmart said it expects its consolidated net sales to increase approximately 4% and operating income to decline about 2%. For the full year, consolidated net sales are anticipated to increase about 3.5% and operating income is predicted to increase about 4% to 4.5%.

“There continues to be a great deal of uncertainty,” Rainey said. “We continue to maintain a prudent approach to our outlook.”