Walmart raises annual targets after strong Q1

  •   01/06/2021 - 12h29
  •   DEHOUI Lionel

The figures published by the American group Walmart for the first quarter of its current financial year are quite interesting. Indeed, over the whole period, the company's activity has been growing. Sales in the United States were up. In addition, the improved results for Q1-2021 have enabled the company to raise its forecasts for this year.

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Walmart raises annual targets after strong Q1

Business growth in the first quarter

In the first three months of its financial year (ended 30 April), the American group Walmart saw its sales increase by 2.7% to 138.31 billion dollars. It significantly outperformed market expectations of $132.16bn in the period.

In the first quarter of 2021, the world's number one retailer posted net income of $2.73 billion (or 97 cents per share), compared to $3.99 billion ($1.4 per share) in the same period last year. Adjusted EPS was $1.69 for the quarter.

It was also above market expectations of $1.21. As for the group's operating profit, it climbed 32.3% to $6.91 billion. Moreover, the strong Q1-2021 results follow a 2020 year driven by a big push into online shopping and delivery.

During Q1 2021, the group benefited in particular from the progress of vaccination programs and the easing of restrictive measures, to continue its growth momentum. These various facts have in fact favoured the return of customers to the company's stores.

 

Sales increase in the first quarter

In the first quarter of 2021, sales in the United States rose sharply. Sales jumped 6% compared to Q1 of last year. Over a two-year period, the increase was 16%. For the quarter as a whole, customers showed a strong desire to get out and spend.

Walmart's U.S. stores (which opened at least a year ago) reported sales growth of 6% for the first three months of this year. This was well ahead of analysts' expectations of a 0.86% increase.

For their part, the company's online sales are showing a 37% growth in Q1-2021. However, this is a far cry from the 74% increase in Q1 2020. It is also lower than the 69% growth achieved in the last quarter (November to January period) of the previous year.

 

Raising of annual targets

On the back of its strong performance in the first quarter, Walmart has raised its guidance for the full year 2021. Thus, the group is now counting on a growth of a little less than 10% of its profits for the year. As a reminder, it had previously forecast a slight decline in its operating profit.

More specifically, the US company now expects EPS growth of 5% to 9% for the full year. For its part, the market is targeting a 1.2% drop.