While most retailers have been struggling during this period of extended lockdowns, there are a few notable exceptions. Walmart (NYSE:WMT) was already doing quite well for itself before the coronavirus pandemic took off. Now, however, the company has seen a surge in sales across the country as Americans continue to stock up on food and household goods. In Walmart’s recently released first-quarter financial results, investors saw an impressive increase in both in-store purchases as well as online orders.
The retail giant confirmed in its first-quarter financial results that sales from U.S. stores had increased by 10%, while the number of online orders had shot up by a whopping 74% as people turned to online shopping instead of going to their local Walmart store in person. Overall, Walmart’s revenue had gone up by 8.6% to $134.6 billion, while net income for the quarter came in at $4 billion. Although management has withdrawn its guidance for the rest of the year, most industry experts expect Walmart’s sales to continue strong for the rest of the year.
“It is a big advantage being an omnichannel retailer and I think that is showing right now. We had backups in our fulfillment centers too” said Walmart’s CFO Brett Biggs according to the Wall Street Journal, adding that the influx of online orders were filled by the many physical store locations that had seen their in-house volumes decline. “That is something that our competitors, they can’t all do it.”
Walmart also said that it ended up paying an additional $900 million in coronavirus related expenses. Most of this figure had to due with paying employees’ bonuses and increased wages during this time. Management went on to say that it expects to pay out a similar amount going into the second quarter. However, the strong sales seen so far more than make up for these new expenses.
Shares didn’t really move much in response to the news, as most investors were already expecting Walmart to announce better-than-average financial figures for its first quarter. Over the past few months, Walmart’s stock has managed reasonably well during this pandemic, with shares generally staying the same for the most part during this time. In comparison, most retailers have seen their shares plummet, especially those with relatively weak e-commerce businesses. The only other major retailer that’s done well alongside Walmart has been Amazon, which has hired tens of thousands of new employees to meet up with demand.
Walmart Company Profile
America’s largest retailer by sales, Walmart operates over 11,300 stores under 58 banners, selling a variety of general merchandise and grocery items. It’s home market accounted for 76% of sales in fiscal 2019, with Mexico and Central America (6%), the United Kingdom (6%), and Canada (4%) its largest external markets. In the United States, around 56% of sales come from grocery, 33% from general merchandise, and 11% from health and wellness items. The company operates several e-commerce properties apart from its eponymous site, including Flipkart, Jet.com, and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-commerce accounted for about 5% of fiscal 2019 sales. – Warrior Trading News