On May 16, 2024, Walmart Inc (WMT, Financial) announced its first quarter results, revealing a notable increase in revenue and operating income, as detailed in its 8-K filing. The company reported a 6.0% rise in revenue to $161.5 billion, surpassing the estimated $159.5 billion, and an adjusted EPS of $0.60, which aligns with analyst expectations.
Company Overview
Walmart, the leading retailer in the United States, continues to dominate the market through its strategy of offering the lowest priced goods and maintaining superior operating efficiency. With over 4,600 stores in the U.S. and more than 10,000 globally, Walmart serves approximately 240 million customers each week. In fiscal 2024, the company generated over $440 billion in domestic sales and an additional $115 billion internationally, underscoring its significant market presence.
Financial Highlights and Strategic Achievements
The first quarter saw Walmart achieve a consolidated revenue of $161.5 billion, a 6.0% increase year-over-year, with a notable 9.6% rise in operating income. Adjusted operating income also saw a significant boost, up by 13.7%. This financial growth was supported by a robust 21% increase in global eCommerce sales, driven by store-fulfilled pickup and delivery services as well as marketplace sales. The company's U.S. comparable sales grew by 3.8%, reflecting strong consumer demand and operational efficiency.
Walmart's strategic initiatives have also paid dividends, particularly in its advertising business, which grew by 24% globally. This includes a 26% increase in Walmart Connect within the U.S. Additionally, the company has successfully managed its inventory levels, which decreased by 2.7% globally, aligning with its streamlined supply chain efforts.
Operational and Market Challenges
Despite its strong performance, Walmart faces ongoing challenges, including competitive pressures in the retail sector and the need to continuously innovate its eCommerce and physical store offerings. The company's ability to maintain high growth rates in online sales and advertising will be crucial in sustaining its competitive edge.
Financial Metrics and Liquidity
Walmart reported cash and cash equivalents of $9.4 billion and a total debt of $50.1 billion. Operating cash flow was $4.2 billion, slightly down by $0.4 billion from the previous year. Free cash flow was negative $0.4 billion, a decrease of $0.6 billion, primarily due to increased capital expenditures to bolster the company's investment strategy. Despite these figures, the company's liquidity position remains robust, supporting ongoing and future business operations.
Outlook and Forward Guidance
Looking ahead, Walmart provided guidance for Q2, expecting net sales growth of 3.5% to 4.5% and operating income growth of 3.0% to 4.5%. For FY25, the company anticipates being at the high end or slightly above its previous guidance for net sales and operating income growth.
In the words of Doug McMillon, President and CEO of Walmart,
Our team delivered a great quarter. Around the world, our goal is simple - we're focused on saving our customers both money and time. It's inspiring to see how our associates are simultaneously executing the fundamentals and innovating to make shopping with us more enjoyable and convenient. We're people-led and tech-powered, and that combination is propelling our business."
Walmart's first quarter results demonstrate its continued ability to navigate a complex retail environment effectively, achieving growth in key financial and operational metrics. As the company moves forward with its strategic initiatives, it remains well-positioned to maintain its market leadership and deliver value to its customers and shareholders alike.
Explore the complete 8-K earnings release (here) from Walmart Inc for further details.
