Walmart Inc. (WMT) - Get Report posted stronger-than-expected first-quarter earnings Tuesday as customers loaded-up on low-margin items such as food and consumer staples amid the peak of the coronavirus pandemic.
Walmart said adjusted earnings for the three months ending in April were pegged at 1.18 per share, up 4.4% from last year and 5 cents ahead of the Street consensus forecast. Group revenues, Walmart said, rose 8.6% from last year to $134.6 billion, firmly ahead of analysts' estimates of a $131.47 billion tally.
Walmart said same-store sales rose 10%, smashing Street estimates of a 7.2% gain, while e-commerce sales surged by a staggering 74%. The group, however, pulled its 2020 financial guidance, which had forecast earnings in the region of $5 to $5.15 per share, due to the ongoing coronavirus uncertainty.
“The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence,” said CFO Brett Biggs.
“Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in almost any environment," he added. "While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly Omni world.”
Walmart shares were marked 0.56.% higher in early trading following the earnings release to change hands at $128.47 each, a move that would extend the stock's year-to-date gain to around 10%.
Walmart said its first-quarter costs rose to around $900 million, most of which was linked to increased hourly and bonus pay for store and warehouse workers as well as cleaning and safety expenses.
Walmart said it late March that it increased the hourly wage it pays warehouse workers by around $2, to between $15 and $19 per hour, and planned to hire an additional 150,000 staff to meet demand - including workers who have lost their jobs in the hotel and restaurant sector with offers of immediate positions in delivery and fulfillment centers.