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HomeBusinessWhy Should You Buy Walmart Q1 2021 Earnings. Beats on Revenue and...

Why Should You Buy Walmart Q1 2021 Earnings. Beats on Revenue and Earnings of $138.3 Billion

 

Walmart (NYSE:WMT) the retail giant and world largest employer first-quarter earnings beat Wall Street’s expectations, as its sales got a boost from strong grocery, pharmacy and e-commerce sales.

Total revenue was $138.3 billion, an increase of $3.7  billion, or 2.7%. Revenue was negatively affected by  approximately $4.2 billion related to recent divestitures in  Walmart International. Excluding currency2, total revenue  would  have  increased  2.1%  to  reach  $137.4  billion.

Walmart U.S. comp sales1  increased 6.0% with market  share  gains  in  grocery.  Operating  income  increased  26.8%.

Walmart U.S. e-commerce sales grew 37% with strong  results across all channels, contributing approximately 360  basis points to comp sales. Sales more than doubled over  the  last two  years.

Sam’s Club comp sales1 increased 7.2%, and eCommerce  sales  grew  47%.  Reduced  tobacco  sales  negatively  affected  comp  sales  by  approximately  340  basis  points.

Membership income increased 12.7%, and total member  count  reached  an  all-time high.

Walmart International net sales were $27.3 billion, a decrease of $2.5 billion, or 8.3%, and e-commerce sales  increased 49%. Net sales were negatively affected by $4.2 billion, or 14.1%, related to recent divestitures, and  changes  in  currency  exchange  rates  positively  affected  net  sales  by  approximately  $0.9  billion.

Consolidated  gross  profit  rate  increased  104  basis  points,  led  by  strength  in  Walmart  U.S.,  while  consolidated  operating  expenses  as  a  percentage  of  net sales  was  relatively  flat.

Consolidated  operating  income  was  $6.9  billion,  an  increase  of  32.3%,  with  strength  across  the  company.

Recently  divested  businesses  in  the  U.K.  and  Japan  contributed  operating  income  of  $289  million,  or  $0.07  of  EPS.

Adjusted  EPS2  excludes  the  effects,  net  of  tax,  of:

  • net  losses  on  equity  investments  of  $0.57;  and
  • an  incremental  loss  on  the  sale  of  our  operations  in  the  U.K.  and  Japan  of  $0.15

 

Click Here For Full Stock Research on Walmart

 

The company raised its outlook for the fiscal year. It expects earnings per share and Walmart U.S.’s operating income to increase in the high single-digits. It reiterated its guidance that Walmart U.S. and Sam’s Club same-store sales will grow in the low single-digits, excluding fuel and tobacco.

“Stimulus helped in Q1, and because of that, we increased profit and revenue guidance,” Walmart Chief Financial Officer Brett Biggs said.

Walmart Inc. (NYSE:WMT) is a behemoth operating not only as a grocery store and also as a pharmacy. There is not a consumer staple product that Walmart Inc. (NYSE:WMT) does not sell. Walmart Inc. (NYSE:WMT) also offers financial services such as check cashing, wire transfers, and bill payments.

“Our optimism is higher than it was at the beginning of the year,” Walmart CEO Doug McMillon said in the earnings announcement Tuesday morning. “In the U.S., customers clearly want to get out and shop.”

“We have a strong position as our store environment improves and e-commerce continues to grow,” McMillon added. “Stimulus in the U.S. had an impact, and the second half has more uncertainty than a typical year. We anticipate continued pent-up demand throughout 2021.”

Walmart Inc. (NYSE:WMT)’s CEO Doug McMillon is considered the genius who took Walmart to the next level of e-commerce operations and soon in direct competition with Amazon.

CWEB Analyst’s have initiated a STRONG BUY Rating for   Walmart (NYSE:WMT) and potential upside of $1500. Amazon has less revenue and it is trading   over $3000. The fundamentals of Walmart are to strong and cash on hand has increased and staggering revenues have contributed even to bigger growth. Amazon revenue for Q1 2021 was $104 Billion so it is very realistic for Walmart to go above$1500 and $2000 very soon.

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