Walmart became a lifeline to millions of people as the coronavirus spread and its profit and sales surged during the first quarter, topping almost all expectations. The result is "stellar" revenue growth, according to one analyst.
Online sales jumped 74%, fueled by a rush on canned foods, paper towels and other supplies as people sheltered in place.
The company said Tuesday that same-store sales surged 10% at U.S. Walmart stores, fueled by demand from consumers stocking up on groceries and other basics. The retailer also attracted "many new customers" during the crisis, noted analyst Neil Saunders of GlobalData Retail, who said consumers were drawn to the store because of its prices and range of products, especially as some shoppers were unable to find products elsewhere.
"As the largest grocer in the U.S. — and one of the handful of retailers that remained open in March and April — many consumers turned to Walmart during the coronavirus crisis, both to stock up pantries and to secure the everyday goods they need," Saunders wrote in a Tuesday morning research note. "The result has been stellar growth of 8.6% in overall revenue, largely supported by a 10.5% sales uplift at Walmart's U.S. division."
But costs soared as well.
The company spent $900 million in additional compensation for workers who manned checkout lines and kept goods flowing at warehouses.
Walmart pulled its guidance for the year, citing the chaos of the pandemic.
The Bentonville, Arkansas, company 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 exceeding Street forecasts by almost $1 billion.
Walmart is one of the first major retailers to report on operations as the the virus gripped the United States. Others, like Macy's were forced to close to curb the spread of the virus.