With many retailers posting disappointing financial results amid the COVID-19 health crisis, Walmart Inc. has proven to be a silver lining for the sector.
The big-box chain today reported first-quarter profits that rose 3.9% to $3.99 billion, or $1.40 per share. On an adjusted basis, earnings per share were $1.18 — exceeding market watchers’ bets by one cent. Revenues for the three-month period ended May 1 also jumped 8.6% to $134.62 billion, versus analysts’ forecasts of $130.31 billion.
According to the Bentonville, Ark.-based company, same-store sales improved 10% — led by strength in food, health and wellness products and other general merchandise categories as coronavirus-panicked shoppers fueled demand for essential goods. E-commerce sales shot up a whopping 74%, with contactless pickup and delivery services helping drive purchases on the retailer’s website and marketplace.
“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,” president and CEO Doug McMillon said in a statement.
Due to its status as an essential retailer, Walmart has continued to operate throughout the pandemic even in hard-hit states and localities. An influx of consumers turned to its locations across the country to stock up on household supplies and other necessities, leading the company to hire an additional 200,000 employees across its Walmart and Sam’s Club stores and distribution centers since mid-March.
However, as uncertainties around the outbreak continue to plague the United States economy, the chain pulled its financial outlook for the full year. It shared that it had absorbed about $900 million in additional costs related to COVID-19, including raising wages for warehouse workers and paying bonuses to store associates. Still, it reported a higher operating profit for the quarter.
“Our business fundamentals are strong, and our financial position is excellent,” added CFO Brett Biggs. “Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment.”