US customers “clearly want to get out and shop”, the boss of Walmart has said after the world’s biggest retailer reported stronger sales than expected.
Walmart chief executive Doug McMillion said optimism had grown since the start of the year and the retail giant raised its full-year profit forecast.
Spending had been boosted by stimulus cheques the government sent to most Americans, Walmart said
US like-for-like sales in the February-April period rose 6% from a year ago.
Sales across the whole group rose by 2.75% to $138.3bn (£97.3bn), beating analysts’ expectations.
“This was a strong quarter,” said Mr. McMillion.
“Every segment performed well, and we’re encouraged by traffic and grocery market share trends.
“We anticipate continued pent-up demand throughout 2021,” he added.
The Arkansas-based retailer said people were spending more after many received additional $1,400 stimulus cheques as part of a US coronavirus recovery package approved in early March.
Sales of non-food items such as clothes, electronics, and toys jumped by 20% as a result.
In a call with analysts, the firm’s chief financial officer said that consumers had also started buying more beauty products as lockdown restrictions ease. Teeth whiteners in particular have done well, he said.
Uncertainty ahead?
Walmart raised its profit forecast for the current financial year, predicting an increase by “high single digits”, rather than a small decline.
But Mr. McMillion added: “Stimulus in the US had an impact, and the second half has more uncertainty than a typical year.”
Profits in the first quarter fell by 32% to $2.7bn, after Walmart saw losses on the sale of Asda in the UK, as well as businesses in Japan and Argentina.
Online sales also lost some momentum in the three months to April, rising 37%, in comparison with a surge of 74% the year before.
The firm reported that customer traffic increased in April for the first time in a year, suggesting that vaccinated shoppers may have more confidence to venture out to brick-and-mortar stores.
Walmart is still spending heavily to grow its online business, such as offering next-day delivery or virtual clothes “try-on” services, so it can compete with other online firms such as Amazon.
“Despite continuing global macroeconomic uncertainty, this is a reflection of its [Walmart’s] exceptional execution as it can continue to ‘shift on the fly as necessary,” said Moody’s vice president Charlie O’Shea.
Comment here