In a May 16^th release, Walmart Inc. (WMT) posted financial results for Q1 of Fiscal 2025 ending April 30^th 2024. All U.S. omni-channel retailers are subject to the same pressures from increased costs for goods, transport and labor in a competitive environment with most consumer demographics and especially lower income earners concerned over expenditure. As a multinational company, Walmart faces additional risks associated with currency fluctuation, geopolitical events and adverse policies by regulators in host-nations. Walmart serves as a bellwether for U.S retail combining groceries, clothing, electronics, drugs, toiletries and household necessities.

For the 1^st quarter of FY 2025 net income was $5,104 million on total revenue of $161,508 million that beat consensus estimates yielding a profit margin of 3.2 percent.  Comparable figures for Q1 FY 2024 ending April 30^th 2023, were net income of $1,673 million on total revenue of $152,301 million with a profit margin of 1.1 percent due to non-recurring charges. Diluted EPS increased from $0.21 for Q1 FY 2024 to $0.63 for the most recent quarter.

Comparing Q1 FY 2025 with the corresponding quarter of the previous year, revenue was up 6.1 percent; comparable store sales up 4.4 percent for the U.S.; gross margin rose from 23.7 percent to 24.1 percent; operating margin increased from 4.1 percent to 4.2 percent for the most recent quarter. Global E-commerce sales grew by 21 percent and inventory was down 2.7 percent.

In commenting on Q1 results, in the Investors’ Call, Doug McMillon, CEO and president stated “Our results were stronger than we anticipated, with sales growth of 5.7 percent and adjusted operating profit up 12.9 percent in constant currency. All three operating segments performed well. The momentum we see across the business is driven by growth in units sold and transaction counts, as well as market share gains, including general merchandise. These are not inflation-driven results. In the U.S., like-for-like sales inflation was about 40 basis points for the quarter, including mid-single-digit deflation in general merchandise and low single-digit inflation in food and consumables. Together with our suppliers, we're making progress lowering prices”.

McMillon attributed improvements to two initiatives, stating  “First, we're providing value. Low prices on quality merchandise are always important to our customers and members. Our combination of everyday low prices, plus a large number of rollbacks is resonating”. Second, we have the selection people are looking for. In the U.S., the number of marketplace sellers grew about 36 percent for the quarter, with the SKU count now sitting at more than 420 million. In Mexico, the number of marketplace sellers grew by more than 50 percent, with SKU count up nearly 80 percent. More often, our customers are finding what they're looking for when they shop on our app or site”.

Forward guidance for FY 2025 was adjusted upwards to the upper end of previously stated ranges including:- A 3.0 to 4.0 percent increase in consolidated revenue; Operating income of 4.0 to 6.0 percent, and an adjusted EPS of $2.23 to $2.37 (post-split). Capital expenditure will be equivalent to 3.2 percent of net sales.

For Q1 FY 2025 segment results comprised:-

• Walmart US: Net sales of $108,700 million, up 4.6 percent over Q1 FY 2024. Operating income $5,300 million with strong gains in groceries and general merchandise. Comparable same-store sales were up 3.8 percent (excluding fuel). Transactions were up 3.8 percent but ticket was flat. E-commerce, was up 22 percent over the corresponding quarter of FY 2024. Inventory declined approximately 4.2 percent.
• International: Net sales of $29,800 million, up 12.1 percent. Operating income was $1,500 million. Growth in E-commerce, 19 percent over the corresponding quarter of FY 2024.
• Sam’s Club U.S.: Net sales of $21,400 million, up 4.6 percent excluding fuel. Operating income was $600 million. Comparable same-store sales were up 4.4 percent. Membership revenue grew 13.3 percent. Growth in E-commerce, increased 18 percent over the corresponding quarter of FY 2024, attributed to curbside pick-up service and delivery.

Walmart operates more than 10,500 stores worldwide of which 5,400 are in the U.S. including 600 Sam’s Club warehouses. Walmart trades under 46 banners in 19 nations and employs 2.1 million.

On April 30^th 2024, Walmart posted assets of $254,054 million including goodwill of $27,999 million. Long-term debt and lease obligations amounted to $54,815 million. The Company had an intraday market capitalization of $482,200 million on May 16^th. WMT trades with a forward P/E of 25.3 and has ranged over a 52-week period from $48.34 to $64.42 (post-split) with a 50-day moving average of $60.78.  Twelve-month trailing operating margin was 4.2 percent and profit margin 2.4 percent.  Return on assets over the past twelve months was 6.8 percent with a return on equity 18.6 percent. At close of trading on May 15^th pre-release, WMT was priced at $60.27. On May 16^th WMT opened post-release at $63.40, up 5.2 percent.