Stockpile… a great name for a heavy metal band.
It’s also the reason Walmart Inc. (WMT) absolutely destroyed analysts’ expectations for 2020’s first quarter.
The world’s biggest retailer reported, on May 19, that same-stores sales rose 10% year on year. That massive surge drove Walmart’s revenues to $134 billion for the three months ending in April.
The company said coronavirus-driven panic buying was the likely reason for the big-time jump in sales as its customers stockpiled low-margin items such as food and consumer staples amid the peak of the coronavirus pandemic.
Think toilet paper, and frozen foods.
The pandemic-led trend also saw Walmart’s adjusted earnings for the three months ending in April at 1.18 per share, up 4.4% from last year and 5 cents ahead of the Street’s consensus forecast.
Group revenues, Walmart said, rose 8.6% from last year to $134.6 billion, firmly ahead of analysts’ estimates of a $131.47 billion tally.
The 10% rise in same-store sales smashed the Street’s 7.2% estimate.
Walmart’s e-commerce sales surged by a staggering 74%.
The huge jump could indicate that Walmart’s e-commerce shoppers may be different from a verbose sect of Amazon.com shoppers who claim to worry about the prospect buying stuff that’s made in China.
The pandemic’s realities, however, led Walmart to pull the remainder of its 2020 financial guidance. That forecast had set earnings in the $5 to $5.15 per share range.
“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,” said CFO Brett Biggs.
“Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment,” he added. “While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.”
Walmart’s share were up about 4% in pre-market trading on the 19th.