Walmart reported disappointing Q1 financial results, saying that they reflected the "unusual environment. U.S. inflation levels, particularly in food and fuel, (that) created more pressure on margin mix and operating costs than we expected."
According to the company, "total revenue was $141.6 billion, up 2.4% … US comp sales grew 3.0% and 9.0% on a two year stack … e-commerce growth was 1% or 38% on a two year stack … Consolidated gross profit rate declined 87 basis points, primarily due to Sam’s Club and 38 basis points in Walmart U.S. on elevated supply chain costs and product mix … Consolidated operating income was $5.3 billion, a decrease of 23.0%, negatively affected by $0.3 billion from divestitures."
CNBC writes that "the significant jump in fuel prices, elevated labor costs and aggressive inventory levels weighed on the company, Chief Financial Officer Brett Biggs told CNBC in an interview. He said some merchandise arrived late and other items, such as grills, plants and pool chemicals, didn’t sell due to 'unseasonably cool weather in the U.S.'
"Plus, he said, Walmart employees returned from Covid leave quicker than expected and caused the company to become overstaffed during part of the quarter. He said those scheduling challenges have been resolved."
The New York Times writes: "The company’s first-quarter results also provided insight into the changing habits of the American consumer. The company’s executives said they had begun to notice inflation shaping behavior. Lower-income shoppers were buying more food and less general merchandise, like clothing and sporting goods. And instead of buying brand-name bacon and items from the deli, they were opting for more of Walmart’s own 'private label' brands, which tend to be less expensive."
From the Washington Post: "The results are unusual … because Walmart has been famously cost-conscious. Its frugal philosophy is a big part of why it’s able to charge low price. If Walmart is struggling even with its thriftiness and superior scale, then smaller and less efficient retailers are in for a very difficult time — not least because there was another note of caution in Walmart’s first quarter announcement."
