Walmart became a lifeline to millions of people as the coronavirus spread and its surging profit and sales during the fiscal first quarter topped almost all expectations.
Online sales in the U.S. jumped 74%, fuelled by a rush on canned foods, paper towels and other crucial supplies needed as people sheltered in place. Same-store sales rose 10% at U.S. Walmart stores on strong sales of food, health and wellness goods.
Costs soared as well, US$900 million in all related to the pandemic.
Cash bonuses issued to all hourly workers reached $755 million and Walmart upped pay by $2 per hour at its warehouses. It rolled out an emergency leave policy and spent money on shields at checkout lines, as well as new signage to control the flow of customers in stores.
Net sales at Walmart International, which includes retail units in Mexico, United Kingdom, Central America and Canada, were $29.8 billion, an increase of 3.4%. Changes in currency rates negatively affected net sales by approximately $1.3 billion.
Walmart pulled its guidance for the year, citing the chaos of the pandemic. It also pulled the plug on Jet.com, an online startup that it bought for more than $3 billion in 2016 as it sought to ramp up online operations to compete with Amazon.com.
Walmart has more than 3,000 U.S. locations for grocery pickup and 1,600 locations that offer grocery delivery. Last fall, it launched “Delivery Unlimited,” a fee-based program that offers unlimited grocery delivery.
This month, the company launched Express Delivery, which gets orders to a customer’s home in less than two hours. The program has been tested in 100 stores since mid-April and will be expanded to nearly 2,000 stores in the following weeks.
In the quarter, Walmart Canada introduced contact-free grocery delivery and also delivered food and supplies directly to the country’s hospital workers.
Walmart had profit of $1.40 per share. Earnings, adjusted for non-recurring gains, were $1.18 per share. That well exceeds the per-share earnings of $1.10 that Wall Street was looking for, according to a survey by Zacks Investment Research.
Revenue of $134.62 billion in the period, also exceeded Street forecasts by almost $1 billion.
Walmart’s share rose more than 4% in premarket trading Tuesday. Its stock is up 7% so far this year.