The retailer attributed the robust performance to turning around market-share losses in its grocery unit, U.S. stimulus checks and pent-up demand after a year affected by lockdowns.

Walmart Inc. (No. 3 in the 2021 Digital Commerce 360 Top 1000) posted sales growth for Q1 of the retailer’s fiscal year 2022, ended April 30.

Sales growth included significant gains in ecommerce revenue. U.S. and global online sales grew 37% and 49%, respectively, compared with the same quarter a year earlier.

Walmart reported its U.S. ecommerce sales rose 37.0% in the quarter, reaching $17.2 billion. For the comparable quarter a year earlier, consolidated ecommerce net sales were $12.2 billion. Globally, ecommerce sales grew 42.8% in constant currency, excluding the impact of recent divestitures.

Walmart reported revenue of $138.31 billion, up 2.7% compared with the $134.62 for the comparable quarter in FY 2021. Net income declined to $2.73 billion, down 31.6% from $3.99 billion a year earlier. But operating income rose to $6.91 billion, up 32.3% compared with $5.22 billion in Q1 of FY 2021. The year-ago quarter included the first wave of pandemic-related stockpiling during the early weeks of the COVID-19 crisis.

“Global ecommerce penetration now represents over 12% of total company sales, an increase of 340 basis points over last year,” CEO Doug McMillon said in a Tuesday conference call with analysts, according to a transcript from Seeking Alpha.


To compete better online, Walmart recently opened its third-party web marketplace to non-U.S. vendors.  The retailer also recently announced plans to acquire Zeekit.  The female-founded, Israeli-based company offers virtual fitting room technology to help shoppers buy apparel online more easily.

“This startup combines fashion and technology through a dynamic virtual fitting room and underscores the desire to grow our apparel business aggressively,” McMillon said about Zeekit during the conference call.

Rising costs are worth noticing

In a note to investors, Oliver Chen, a retail analyst at investment firm Cowen Inc., says Walmart can outperform analyst expectations going forward. But investors should keep an eye on the massive retailer’s rising expenses.

“Grocery appears in good shape and gained share but rising input costs and increasing competition will be key to monitor,” Chen said in the note.


Walmart reported its cost of sales grew 1.2% year over year in Q1, reaching $103.272 billion, up from $102,026 billion for the comparable period in FY 2021. Also, operating, selling, general and administrative expenses grew 2.8% year over year in Q1, to $28.129 billion, up from $27.372 billion a year earlier.

Category growth and Walmart+

U.S. grocery sales (online and offline) decreased by a single-digit percentage, compared with a year earlier when consumers were stocking up heavily during the initial stages of pandemic-related lockdowns. But market share was up, Walmart reported, without providing specific numbers.

During the conference call, Brett Biggs, Walmart’s chief financial officer, said: “The second quarter started off a bit better than originally anticipated as stimulus spending continues to benefit certain general merchandise categories and we expect grocery market share gains to continue.”


Health and wellness sales in the U.S. grew at a “mid-single-digit” rate during the quarter, Walmart says, without offering specifics.

“Strong sales reflected branded drug inflation, lapping last year’s COVID-related closures of Vision Centers and this year’s vaccine administration,” according to the presentation Walmart showed during the conference call.

General merchandise sales in the U.S. grew more than 20%, the retailer reported. Those sales were “aided by stimulus spending and reflected customer trends toward recreation and home improvements including categories such as apparel, home, outdoor living and sporting goods,” according to the presentation.

Like previous quarters, Walmart officials declined to provide much detail about Walmart+, the paid membership service launched last fall as Walmart’s answer to the Amazon Prime program from Inc. (No. 1).


“With stores improving in traffic and ecommerce growing and marketplace and all that kind of stuff… we don’t think that Walmart+ should be the primary focus at the moment for us with all these other opportunities. So, we’ll keep growing it,” McMillon said in response to an analyst’s question during the May 18 conference call.

The pandemic and stimulus checks boost sales at Walmart

In an interview with Bloomberg News on Tuesday, Biggs said the retail giant witnessed “modest food inflation” in the quarter. Also, expenses in the U.S. rose faster than sales because of spending on technology and employee wages. And Walmart will lose the benefit of the stimulus in the months ahead. In a recent survey from Stifel & Co., 57% of respondents said they’d already spent their government check, up from 34% who said so in mid-March.

In addition to stimulus checks, Biggs said sales trends also reflect a growing desire to get back to normal after a year of lockdown. “We are seeing high demand in anything related to travel and getting back to work,” he told Bloomberg. “We laughed at one item that had high demand, which is teeth whitener, as masks are coming off.”

Compared with earlier estimates for a slight decline, the retailer now expects earnings per share to rise by a high single-digit percentage this year. In the second quarter, that same metric will fall by a low single-digit percentage, but that’s still better than the mid-to-high single-digit drop it expected earlier. “We typically don’t update guidance at end of the first quarter, but given the quarter, we felt we needed to come out and be clear,” Biggs told Bloomberg.


The retailer attributed the robust performance to turning around market-share losses in its grocery unit, U.S. stimulus checks and pent-up demand after a year affected by lockdowns. Economists have dubbed this trend “revenge spending.” Customer traffic in stores increased in April for the first time in more than a year. “In the U.S., customers clearly want to get out and shop,” McMillon said in a statement announcing the results.

While COVID-19-related expenses have subsided, Walmart and other big retailers now face rising costs for transportation and labor. They need to decide how much of the looming price hikes from vendors they can pass along to shoppers who will shift some spending away from retailers and back to restaurants and travel this year. In response, Walmart is pushing harder into new, more profitable areas like digital advertising, telehealth and financial services.

For the first quarter of FY 2022, ended April 30, Walmart reported:

  • Comparable sales growth of 6.0%.
  • Revenue of $138.31 billion, up 2.7% compared with the $134.62 for the comparable quarter in FY 2021.
  • Operating income of $6.91 billion, up 32.3% compared with $5.22 billion in Q1 of FY 2021.
  • International net sales were $27.3 billion, a decrease of $2.5 billion, or 8.3%, and international commerce sales increased 49%. Net sales were negatively affected by $4.2 billion, or 14.1%, related to recent divestitures, and changes in currency exchange rates positively affected net sales by about $0.9 billion.
  • Consolidated gross profit rate increased 104 basis points, led by strength in Walmart U.S., while consolidated operating expenses as a percentage of net sales were flat.

Percentage changes may not align exactly with dollar figures due to rounding.