Walmart Q1 Ecommerce Sales Soar

Wal-Mart Stores Inc. witnessed strong ecommerce growth in its U.S. operations during the first quarter of fiscal 2018, with much of the growth occurring organically through Walmart.com.

During the period, sales and gross merchandise sales volume here increased 63 percent and 69 percent, respectively. Ecommerce sales reached $3.8 billion in Q4, a 14 percent rise from the year-ago period. In the company’s Q4, ecommerce accounted for 2.9 percent of its total revenue. Although Seattle-based Amazon.com still leads the field by a wide margin, with Q1 fiscal 2017 ecommerce sales of $23.73 billion, Walmart is working hard to give the online giant a run for its money.

This year, New York-based market researcher eMarketer predicts that ecommerce will represent 9.2 percent of total retail sales in the United States, which the company expects to reach $5 trillion, a 3.5 percent increase over 2016, and that U.S. mobile retail sales will come to $157.14 billion in 2017, up 35.5 percent over last year and accounting for 34 percent of U.S. ecommerce sales and 3.1 percent of total retail sales.

The company also posted a Walmart U.S. comparable-store sales increase of 1.4 percent, excluding fuel, spurred by a 1.5 percent traffic increase. Including fuel, comps were 1.5 percent. Comp traffic grew 3 percent on a two-year stacked basis. Diluted EPS came to $1, a 2 percent increase from last year. Total revenue was $117.5 billion, up 1.4 percent; excluding currency, total revenue was $118.8 billion, a 2.5 percent rise.

“We delivered a solid first quarter and we’re encouraged by the start to the year,” said Walmart President and CEO Doug McMillon. “We’re moving faster to combine our digital and physical assets to make shopping simple and easy for customers. Our customers have choices, and we have to earn their business with every interaction.”

“It continues to be an exciting and transformational time at Walmart,” noted EVP and CFO Brett Biggs. “The actions we’re taking are delivering results. Important initiatives underway in the U.S. are accelerating significant growth in ecommerce, generating continued positive comp-store sales and driving traffic to our stores. Most of our key international markets continue to perform well, and Sam’s Club has good momentum. We remain confident in our strategy and are moving with speed to deliver value to our customers, associates and shareholders.”

Among the segments, Walmart International’s net sales were $27.1 billion, a 3.5 percent decline; excluding currency, net sales were $28.3 billion, a 0.8 percent uptick. In addition to its higher comps. Walmart U.S. net sales were up 2.9 percent to $75.4 billion, from $73.3 billion in the year-ago period, while Sam’s Club’s net sales rose 2.8 percent to $13.9 billion, from $13.6 billion last year.

Additionally, the company generated $5.4 billion in operating cash flow and returned $3.7 billion to shareholders via dividends and share repurchases.

Noting Walmart’s first period of EPS growth in more than two years, Ray Young, of New York-based Gordon Haskett Research Advisors, lauded the company’s “exceptional results on a standalone basis,” which he attributed to expanding digital sales, accelerating traffic and abating deflation, all of which are giving Walmart “momentum in its U.S. businesses.”

Walmart issued second-quarter guidance of EPS of $1 to $1.08, excluding an estimated net benefit of about 5 cents from the sale of Suburbia, the company’s apparel format in Mexico. Comp-sales guidance for the 13-week period ending July 28 was 1.5 percent to 2 percent for Walmart U.S., excluding fuel, and 1 percent to 1.5 percent for Sam’s Club, also excluding fuel.