- Today Walmart revealed its quarterly earnings and it beat Wall Street expectations. Plus the company said it was shutting down Jet.com.
Today Walmart Inc (NYSE: WMT) announced its quarterly earnings and it beat Wall Street expectations. Walmart hit record U.S. online sales as consumers were stocking up for essentials during the coronavirus pandemic.
Initially, sales of toilet paper, surface cleaners, and other groceries surged. Walmart Chief Executive Officer Doug McMillon pointed out that the end of the quarter saw a phase of “relief spending,” which was around the time that consumers started receiving their economic stimulus checks. There was especially an increase in categories like TVs, video games, sporting goods, toys, and apparel.
However, Walmart is not expecting spending to be at the same pace for the second quarter. And Walmart also pulled the forecast for the full year due to the uncertainty associated with the pandemic.
Growth in Walmart’s online business surged 74% for the first quarter as the company’s pick-up and delivery services were strongly utilized over the past few months as demand increased.
Due to the strength of Walmart’s in-house online operations, the company decided to shut down Jet.com — which is the online e-commerce company it acquired for $3.3 billion in 2016. Walmart plans to bring on the Jet staff into its own operations and Jet will continue as a standalone website. Walmart pointed out that Jet was critical for accelerating its “omni strategy.” Jet co-founder Marc Lore is currently the head of Walmart’s US e-commerce operations.
“This morning Walmart announced our results for Q1, including 10% comp growth for the U.S. business overall, with 74% growth for eCommerce,” wrote Lore in a LinkedIn post.”I’m so proud of how our associates rose to the occasion. We managed through immense pressure on our site and supply chain, and it was incredible to see how we operated and delivered for our customers.”
In terms of revenue, Walmart reported an increase of 8.6% to $134.6 billion. And to address the demand surge, Walmart hired about 150,000 new employees across its stores and fulfillment centers. The additional costs associated with the pandemic hit nearly $900 million. Walmart saw an operating income increase of 5.6% to $5.22 billion for the quarter. And adjusted earnings per share was at $1.18, which is an increase of 4.42% over the same period last year.
“More than ever, the news this quarter is our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future,” explained McMillon.
Walmart Chief Financial Officer and head of Walmart Enterprise Solutions Brett Biggs noted that this quarter was a “roller coaster ride” that started strong in February followed by a surge in stockpiling in the middle of March and then slowed down in early April only to speed up again after the government stimulus checks were distributed.
“It really was unprecedented,” said Biggs in an interview via Bloomberg. “It was several quarters within a quarter.”