Revenue: $134.62 billion, versus the $130.91 billion estimate
Adjusted earnings per share: $1.18, versus the $1.12 estimate
Comparable sales: +10% in US, versus the +7.2% estimate
Ecommerce sales: +74%
Walmart’s strength in ecommerce is apparent in not only the 74% sales growth registered in the quarter, but also by the company’s decision to discontinue its Jet.com brand.
Walmart will focus on leveraging the continued strength in its Walmart.com brand, the company said, instead of Jet.com.
Walmart acquired Jet.com in 2016 for $3.3 billion to expand its ecommerce capabilities.
Operating expenses leveraged for the quarter primarily as a result of strong topline growth and the divestiture of Walmart Canada Bank, partially offset by incremental costs related to COVID-19.
Despite the robust first quarter earnings, Walmart said it would withdraw its guidance for its fiscal year 2021.
Chief Financial Officer Brett Biggs said in Walmart’s earnings release:
“The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis.”
Net sales increased 7.6% and comp sales increased 8.5%.
◦ Sales were positively affected by a greater level of stock-up activity in response to COVID-19. Higher growth in food and consumables was partially offset by weaker demand for general merchandise and apparel.
◦ Demand for online grocery greatly accelerated during the period.
◦ The company finalized the sale of Walmart Canada Bank on April 1, 2019, which resulted in a headwind to sales of 85 basis points.
Gross profit rate declined primarily as a result of the divestiture of Walmart Canada Bank and increased demand for lower margin categories in response to COVID-19.