Walmart’s Revenue Up 2.7% On Pent-Up Demand, E-Commerce Boost

World’s largest retailer Walmart Inc. (NYSE:WMT), on Tuesday, May 18, reported revenue growth of 2.7% YoY to US$138.3 billion, an increase of US$3.7 billion, in the first quarter of 2021, as pent-up demand led to a record surge in sales.

The stock was up 3.38% to US$143.54 at 9.21 am ET on Tuesday, compared to its previous close, after it posted a better-than-expected Q1 earnings report.

Q1 Earnings Highlights

Walmart’s e-commerce sales in the US rose by 37% across all segments, even as its sales doubled in the last two years. Its US comp sales increased by 6% compared to the year-ago period, boosted by its grocery business. Its operating income surged 26.8% from the same period in the previous year.

Sam’s Club, Walmart’s retail only warehouse club, saw retail and e-commerce sales surge by 7.2% and 47%, respectively. Walmart’s global e-commerce sales jumped 49% during the period.

The company’s consolidated operating income surged 32.3% to US$6.9 billion, and its earnings per share (EPS) was US$0.07.

Source: Pixabay.

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How Did the Pandemic Help WMT to Grow?

Consumers preferred to buy online to stock up groceries and other kitchen items. Eating out was out of bounds for most people as restaurants had the limited capacity or only a few had resumed operations. Moreover, clients did not have to look out elsewhere for purchases as Walmart had all the items they needed. It gave a significant boost to its sales volumes. Walmart customers also had adequate money to splash on food and other needs with a regular inflow of stimulus cash.

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How Large is Walmart?

Walmart has around 10,500 stores and clubs across 24 countries. It also reaches out to its customers globally through its e-commerce segment. The company currently has about 220 million customers. It also employs scores of people across the globe. The company has three primary marketing segments: grocery, merchandise, and health and wellness products. Walmart also sells its products through Flipkart, shoes.com, and Chinese e-commerce giant JD.com, in which it also has a 10% stake.

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Walmart has a market cap of around US$390 billion. The company anticipates its share prices to increase to US$160 this year. Its P/E ratio is 29.36, and the forward P/E ratio yearly is 25.63. Earnings per share (EPS) is US$4.73, and annualised dividend is US$2.20. The company aims to increase its spending to US$14 billion this year to help strengthen its supply chain and boost automation.

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