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

 

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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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