NEW YORK (AP) — Walmart blew past Wall Street projections in the first quarter with US stimulus payments to Americans helping to boost sales and the company raised its expectations for the year.
Sales at stores opened at least a year rose 6 per cent, slowing from the 8.6 per cent increase during the fiscal fourth quarter. But it topped last year’s 10 per cent spike when Walmart turned into a pandemic lifeline for millions of people. Online sales rose 37 per cent down from its 69 per cent during the fourth quarter.
“Our optimism is higher than it was at the beginning of the year,” said CEO Doug McMillon. “In the US, customers clearly want to get out and shop.”
McMillon said that government stimulus money boosted sales and that there is a lot of pent-up demand as the nation emerges from the pandemic.
Shares rose nearly 4 per cent, or $3.52 per share to $143.78 before the opening bell.
Walmart has pushed further into fast and convenient delivery over the past year and sales at its stores were elevated with so many other retailers forced to close during lockdowns. Even the massive infrastructure put into place by Walmart in recent years were strained by the crush of orders from millions of people sheltering at home.
It bumped up spending by $14 billion to speed up its distribution network and in February said it would raise its average hourly wage to more than $15 per hour, a $1 increase. Amazon and Target have already increased hourly wages to $15 for all workers.
First quarter net income was $2.73 billion, or 97 cents per share in the three month period ended April 30. That compares with $3.99 billion, or $1.40 per share in the year-ago quarter. Adjusted earnings was $1.69 per share. Analysts were expecting $1.21 per share, according to FactSet.
Sales rose 2.6 per cent to $137.16 billon. Analysts were expecting $132.16 billion.
Walmart said that it now expects earnings to increase in the high single digits; previously, the company had projected a slight decline in profit for the year.
On Friday, Walmart said it will no longer require vaccinated shoppers or workers to wear a mask in its US stores unless state or local laws say otherwise. It’s offering workers a $75 bonus if they are vaccinated.