Total revenue at the world’s largest retailer fell by 0.1% to $114.8 billion in the three months ended April 30. Analysts had expected $115.6 billion. Excluding the impact of currency fluctuations, revenue increased by 2.7%.
Net sales at U.S. Walmart stores rose by 3.5% to $70.2 billion. Although average transaction value rose by only 0.1%, traffic increased by a full percentage point, resulting in a comparable sales gain of 1.1%. The company reported good response to spring and summer apparel assortments and continued growth in activewear, where strong brands across the category helped meet customers’ assortment needs. Indoor home categories with key items and investments in opening price points drove momentum.
Walmart international sales fell by 6.6% to $30.3 billion, which, excluding the impact of currency, was actually a 3.4% increase. Particularly noteworthy was the overall performance in Mexico, which not only had its strongest net quarterly sales growth in more than two years, but also grew operating income faster than sales. Walmart’s results in Mexico were due to better comps in all key formats, including Sam’s Club.
Sam’s Club net sales declined by a lower-than-expected 3 percent to $13.5 billion. Global e-commerce sales increased roughly 17 percent.
Net income fell 7 percent to $3.34 billion, or $1.03 per share, from $3.59 billion, or $1.11 per share, in the year-earlier period, missing Wall Street estimates of $1.05 per share. The currency impact on earnings per share was approximately $0.03.
“We had a solid first quarter. We took some important strategic steps to strengthen the foundation of our business for the future,” President and CEO Doug McMillon said it a statement. “We need to continue to get better at consistently running great stores, clubs and e-commerce everywhere we operate…and we are.”
In April, Walmart launched a comprehensive set of store and club initiatives intended to improve short- to mid-term performance in the United States that included increasing wage rates, improving store structure, and adding department managers. The company has pilots under way that will improve its scheduling process and training. This set of initiatives, which is expected to roll out throughout the year, is designed to improve the customer experience and translate into higher comp store sales over time.