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Retail giant Walmart (WMT) reported stronger-than-expected first-quarter earnings on Tuesday, driven by a surge in e-commerce and higher traffic in stores as the coronavirus pandemic sparked massive purchases in household goods.
Walmart’s stock, which closed on Monday at $127.75, jump by more than 4% higher in the pre-market trading.
Here were the main numbers compared to Bloomberg consensus forecasts:
Revenue: $134.6 billion vs. expectations of $132.48 billion
Adjusted EPS: $1.18 vs. expectations of $1.12
Walmart U.S. comp-store sales (excluding gas): 10% versus expectations of +8.6%
Walmart U.S. e-commerce sales: up 74%
Unlike most in the brick-and-mortar retail space, Walmart’s spiking online sales been complemented by resilient store traffic.
While both saw significant year-over-year growth from 2018 to 2019 in Q1, that visit growth turned to a decline in 2020 as a result of the pandemic. Yet, the picture is far more complex than a simple decline.
“Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future,” CEO Doug McMillon said in the management commentary.
The closely-followed comparable-store sales number jumped 10%, as homebound customers made fewer trips to stores while making larger purchases. The average ticket size grew 16.5%, while the comparable transaction number declined 5.6%.
“As a result of the health crisis and related stay-at-home mandates, customers consolidated store shopping trips with larger average baskets and shifted more purchases to eCommerce,” the retailer said in its commentary.
According to data from analytics firm Placer.ai, both Walmart and Target (TGT) “have been two of the more significant retailers to track during the pandemic because of their essential retail status.”
Traffic to Walmart’s Supercenters were up 8.3% year over year in February, and early March saw year-over-year jumps of 6.7% and 15% respectively — traffic only overshadowed by Easter and July 4th, Placer.ai noted.
Yet the biggest story has been Walmart’s online sales, which skyrocketed by 74% in the quarter, driven by its popular online grocery pickup and delivery service in the midst of the pandemic. At the end of the quarter, Walmart featured online grocery pickup at 3,300 stores and same-day delivery at 1,850 stores. The retailer also launched Express Delivery during the quarter.
However, Walmart said it will discontinue Jet.com, which it acquired in September 2016 for $3 billion, because of strength of the Walmart.com brand. Walmart added that the Jet.com acquisition was “critical to accelerating its omni strategy.”
Elsewhere, Walmart withdrew its guidance for fiscal 2021, citing “unprecedented variability” of the macro-environment due to COVID-19.
“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,” CFO Brett Biggs said in a statement.
Since March 19, Walmart added 235,000 associates, mostly in temporary or part-time roles, across its stores, clubs, and distribution centers to keep up with growing demand and to provide employment to those who lost their jobs as the pandemic wreaked havoc on the economy. Walmart also doled out cash bonuses to its workers and expanded benefits during the pandemic.
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.