Walmart is proving that even the nation’s largest retailer may not be immune to the economic pressures that are causing consumers to reevaluate their spending habits.
The Bentonville, Ark.-based firm revealed quarterly and full-year earnings Tuesday before the market opened, improving on top-line revenues, but failing to meet Wall Street’s expectations after falling short on bottom-line profits. Company shares fell more than 7 percent during pre-market hours.
“Bottom-line results were unexpected and reflected the unusual environment,” Doug McMillon, president and chief executive officer of Walmart, said in a statement. “U.S. inflation levels, particularly in food and fuel, created more pressure on the 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.”
For the most recent quarter, or the three-month period ending April 30, total revenues grew 2.4 percent to about $141 billion, up from more than $138 billion a year ago. Comp sales at Sam’s Club grew 10.2 percent, and 17.4 percent on a two-year stack. Membership income rose 10.5 percent.
Walmart U.S. e-commerce sales increased 1 percent, or 38 percent on a two-year stack. Last August, McMillon said the company’s global e-commerce business was on track to reach $75 billion in revenues by the end of the year. The company still hasn’t said whether it has reached that goal yet.
Meanwhile, net sales at Walmart International fell $3.5 billion during the most recent quarter, or 13 percent to $23.8 billion, negatively impacted by $5 billion, due to divestitures. The retailer logged $2.05 billion, down from $2.73 billion during last year’s first quarter, as a result.
Still, McMillon expressed optimism for the future.
“Across our businesses, we had a strong top-line quarter,” he said. “We’re grateful to our associates for their hard work and creativity.”
Walmart anticipates current quarter revenues will increase about 3 percent, excluding divestitures. U.S. comp sales are also expected to grow — slightly more than 3 percent — excluding fuel, while earnings-per-share are expected to grow in mid-single digits, excluding divestitures.
For the full year, the company expects net revenues will rise about 4 percent, excluding divestitures. Walmart U.S. comp sales are expected to increase roughly 3.5 percent, excluding fuel, while earnings-per-share for the year will decrease about 1 percent, excluding divestitures.
The company ended the quarter with $11.8 million in cash and cash equivalents and more than $32 million in long-term debt.
Shares of Walmart, which closed up 0.11 percent Monday to $148.21, are up 6.7 percent, year-over-year.