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Walmart reports mixed first quarter results

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Inflation hurt profits

Walmart reports mixed first quarter results

BENTONVILLE, Ark. – Walmart posted mixed results for the first quarter of fiscal 2023.

Adjusted earnings per share for the three months ended April 30 were $1.30, well short of the $1.48 that analysts had forecast. The company said inflation hurt the bottom line.

Revenue beat analysts’ estimates, rising 2.4% to $141.57 billion. Wall Street had predicted $138.05 billion. Same-store sales growth for U.S.-based stores and clubs also topped predictions.

Doug McMillon

Doug McMillon

“Across our businesses, we had a strong top line quarter. We’re grateful to our associates for their hard work and creativity. Bottom line results were unexpected and reflect the unusual environment. U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs
than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future,” said president and CEO Doug McMillon.

Walmart revised its second quarter and full year EPS guidance from an increase in the mid-single digits to a decline of about 3%.

Revenue growth in the first quarter was negatively affected by $5.0 billion due to divestitures and $0.4 billion from currency.

Walmart U.S. comp sales grew 3.0% and 9.0% on a two-year stack. E-commerce growth was 1%, or 38% on a two-year stack. Sam’s Club comp sales increased 10.2%, and 17.4% on a two-year stack. Membership income increased 10.5%.

Walmart International net sales were $23.8 billion, a decrease of $3.5 billion, or 13.0%, negatively affected by $5.0 billion due to divestitures, and $0.4 billion from currency fluctuations. There were positive comps across all markets.

The global advertising business grew more than 30%.

The company’s consolidated gross profit rate declined 87 basis points, primarily due to Sam’s Club and 38 basis points in Walmart U.S. on elevated supply chain costs and product mix. Consolidated operating expenses as a percentage of net sales increased 45 basis points, primarily due to increased wage costs in Walmart U.S.

Consolidated operating income was $5.3 billion, a decrease of 23.0%, negatively affected by $0.3 billion from divestitures.




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