Walmart Announces Q1 FY2023 Financial Results – Stock Falls Over 10%

In a rather confusing pattern, Walmart has announced their Q1 results which they label as FY 2023, even though they are for the first quarter that has just passed. They have also been unable to avoid the high Wall St expectations which have resulted in the company’s stock price taking its biggest dip of 11.35% in a single session since 1987.

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Walmart has maintained revenue growth as demand has remained resilient for the range of the company’s products, even as consumer prices have climbed across the country. U.S. comparable sales excluding gas — grew by a greater-than-expected 4%, and Walmart-only U.S. comparable sales excluding gas also grew by a better-than-anticipated 3%.

Walmart however just like Amazon noted, has fallen victim to rising inflation and general business costs which have weighed on profitability. Resulting in earnings falling short of estimates for the company’s three-month period that ended April 30.

Walmart Q1 FY23 Financial Results Highlights

“Across our businesses, we had a strong topline quarter. We’re grateful to our associates for their hard work and creativity. Bottomline results were unexpected and reflect the unusual environment. U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”

Doug McMillon, President and CEO, Walmart

• The company delivered strong top-line growth globally. Total revenue was $141.6 billion, up 2.4%, or 2.6% in constant currency. Growth negatively affected by $5.0 billion due to divestitures and $0.4 billion from currency.
  
• Walmart U.S.comp sales grew 3.0% and 9.0% on a two-year stack. eCommerce growth was 1% or 38% on a two-year stack.
  
• Sam’s Club comp sales increased 10.2%, and 17.4% on a two-year stack. Membership income increased 10.5%.
  
• Walmart International net sales were $23.8 billion, a decrease of $3.5 billion, or 13.0%, negatively affected by $5.0 billion due to divestitures, and $0.4 billion from currency fluctuations. Positive comps across all markets.
  
• Global advertising business grew more than 30%.
  
• Consolidated gross profit rate declined 87 basis points, primarily due to Sam’s Club and 38 basis points in Walmart U.S. on elevated supply chain costs and product mix.
  
• Consolidated operating expenses as a percentage of net sales increased45 basis points, primarily due to increased wage costs in Walmart U.S.
  
• Consolidated operating income was$5.3 billion, a decrease of 23.0%, negatively affected by $0.3 billion from divestitures.

You can access the full financial report with balance sheets and cash flow data here.