Walmart (WMT) stunned Wall Street again, causing the stock to jump as much as 7% in early trading Thursday.
For the first quarter of fiscal 2025, America’s largest retailer reported revenue of $161.51 billion, higher than the expected $159.58 billion, while adjusted earnings per share were also higher at $0.60, compared to estimates of $0.53.
“Customers continue to come to Walmart not only for value but also for convenience,” John David Rainey, Walmart’s chief financial officer, told Yahoo Finance. “We see that portfolios are still stretched, they are [customers] “You’re still looking for value.”
On a call with investors, CEO Doug McMillon said: “The momentum we are seeing across the business is driven by growth in units sold and number of transactions as well as market share gains, including general merchandise. These are not inflation-driven results.”
Total U.S. same-store sales rose 3.9% year over year, led by growth from Sam’s Club, up 4.4%, as Americans sought deals on groceries. The wholesale retailer reached a record high in terms of membership and excess members, growing membership income by more than 13%.
Its namesake stores saw same-store sales grow 3.8%, fueled by repeat customer visits, although ticket volume was flat. The company indicated that it is gaining market share among high-income families.
Global e-commerce sales jumped 21%, boosted by in-store pickup and delivery as well as the online marketplace.
These results come at a time when the company plans to eliminate hundreds of jobs and has asked employees to move to its headquarters in Bentonville, Arkansas. The Wall Street Journal reported Tuesday.
Walmart is the largest employer in the United States, with 1.6 million American workers.
During the quarter, the company also conducted a stock split for the 12th time in 50 years. Its shares are up 13.9% this year, outperforming the S&P 500 (^ GSBC10% profit.
Ahead of the report, UBS analyst Michael Lasser wrote that “the stock has room to run” in a note to clients. He added that the first quarter should show “more evidence that the stock fits well into what the market is looking for right now, which is consistent action that is more insulated from ongoing macro pressures from the rest of the group.”
“Walmart is in a dual position to attract both low-income and upscale consumers over the coming years,” Deutsche Bank analyst Christina Katai told Yahoo Finance by phone ahead of the report.
Daniela Breithauer, an analyst at HSBC Bank, described the stock as the best choice before the report was released.
“The future of grocery shopping is increasingly inclusive, and Walmart is the largest grocer in America,” Breithauer told Yahoo Finance. “You have a big player online, which is Amazon, but in grocery stores…Walmart has a big advantage.”
Merchandise sales declined by low single digits, consistent with the last three quarters. But U.S. grocery sales increased by mid-single digits, driven by the sale of more fresh foods and private-label goods, Marc Astrachan, Stifel’s managing director, wrote in a note to clients after the results..
The company benefits from its pricing power and economic scale, in addition to technology investments and $9 billion in store renovations.
Recently, the company introduced a new private label brand called Better merchandisewhich offers high-quality, trendy items at prices ranging from under $2 to under $15.
Its lucrative advertising business is also boosting its revenues, with a 24% increase in global sales and a 26% jump in US sales.
Its subscription business, Walmart+, has also grown by double digits, with CEO McMillon saying members are interacting more frequently and spending more than other customers.
Earnings collapse
Here’s what Walmart reported in the first quarter of fiscal 2025, compared to Wall Street estimates compiled by Bloomberg:
he won: $161.51 billion compared to $159.58 billion
Adjusted earnings per share: $0.60 vs $0.53
Total US same-store sales growth: 3.9% vs 3.42%
Walmart store sales growth in the United States: 3.8% vs 3.45%
Sam’s Club store sales growth in the United States: 4.4% vs. 3.3%
Growth of Walmart’s e-commerce in the United States: 22% vs 13.33%
For the full fiscal year 2025, the company expects net sales to grow at the high end by 3% to 4% and operating income to grow at the high end by 4% to 6%.
“We will revisit our full-year guidance as we exit [the] Second Quarter. This is more in line with our historical cadence of updates, and is consistent with the philosophy we have as a management team to recognize early momentum, but also to remain cautious early in the year given the overall uncertainty and still much of the year ahead of us,” Walmart CFO John David Rennie said. In contact with investors after the results of the first quarter of fiscal year 2025.
Correction: A previous version of this article misspelled the last name of Walmart CEO Doug McMillon. We apologize for this error.
Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Brooke De Palma Or email her at [email protected].
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