Walmart Q1 beats expectations as stimulus checks, pent-up demand fuel online spending

The world's largest retailer said its first quarter US e-commerce sales increased 37% while same-store sales increased 6%.

Walmart's Q1 earnings and revenue beat Wall Street expectations on Tuesday as the company continues to see demand for its online grocery, pickup and delivery services.

The world's largest retailer said its first quarter US e-commerce sales increased 37% while same-store sales increased 6%. The increase in e-commerce was led by Walmart's online grocery business, where pickup and delivery services experienced high sales volumes. 

Meanwhile, Walmart said the same-store growth was aided by stimulus spending, despite lapping last year's COVID-related panic buying phase and stimulus.

As for the numbers, Walmart reported a net income of $2.7 billion, or 97 cents per share. Non-GAAP earnings were $1.69 per share on revenue of $138.31 billion. Wall Street was looking for earnings of $1.21 per share on revenue of $131.9 billion. Shares of Walmart were up over 3% in early trading.

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Throughout the pandemic, Walmart has leveraged its scale and supply chain to ramp up e-commerce operations and rapidly expand its food business. Walmart's online grocery and e-commerce strategy relies heavily on the chain's enormous physical footprint, as well as recent revenue-driving additions, such as the launch of Walmart+ and fuel perks for customers.

Notably, Walmart has still not disclosed how many subscribers it has for Walmart+.

Walmart CEO Doug McMillon said the company is more optimistic now than it was at the start of the year, as consumer trends suggest "pent-up demand" and a desire to get out and shop. 

As such, the company raised its outlook for the fiscal year, saying it now expects earnings per share and Walmart's operating income in the US to increase in the high single-digits. Guidance related to Walmart and Sam's Club US same-store sales went unchanged.

"This was a strong quarter," McMillon said in prepared remarks. "Every segment performed well, and we're encouraged by traffic and grocery market share trends. We have a strong position as our store environment improves and eCommerce continues to grow. Stimulus in the U.S. had an impact, and the second half has more uncertainty than a typical year."