Walmart (WMT) wowed Wall Street yet again, causing shares to jump nearly 7% in pre-market trading.
For its fiscal 2025 Q1, America’s biggest retailer posted revenue of $161.51 billion, higher than the $159.58 billion expected, while adjusted earnings per share also came in higher at $0.60, compared to estimates of $0.53.
CEO Doug McMillion called it a “great quarter” in the release, adding that the team is “focused on saving our customers both money and time.”
Total US same-store sales increased 3.9% year over year, led by growth from Sam’s Club, up 4.4%, as Americans sought out deals on grocery items.
Its namesake stores saw same store sales grow 3.8%, boosted by customers going more frequently, though ticket size was flat. The company alluded that it was gaining market share among upper income households.
Global e-commerce sales leapt 21%, boosted by store pickup and deliver, and its online marketplace.
These results come as the company plans to cut hundreds of jobs and asked employees to relocate to its headquarters in Bentonville, Ark., the WSJ reported on Tuesday.
Walmart is the largest US employer, with 1.6 million US workers.
During the quarter, the company also conducted a stock split for the 12th time in 50 years. Its shares are up 13.9% this year, outperforming the S&P 500’s (^GSPC) 10% gain.
Ahead of the report, UBS analyst Michael Lasser wrote that “the stock has room to run” in a note to clients. He added that Q1 should demonstrate “further evidence that the stock fits well with what the market is looking for right now, a consistent business that is more insulated from ongoing macro pressures than the rest of the pack.”
“Walmart is in a double tailwind position to gain both low- and high-end consumers over the coming years,” Deutsche Bank analyst Krisztina Katai told Yahoo Finance over the phone prior to the report.
HSBC analyst Daniela Bretthauer called the stock a top pick ahead of the report.
“The future of grocery shopping is becoming increasingly omnichannel, and Walmart is America’s largest grocer,” Bretthauer told Yahoo Finance. “You have a big player online, which is Amazon, but in groceries … Walmart has a big advantage.”
Merchandise sales dropped in the low-single digits, consistent with the last three quarters. But U.S. grocery sales increased in the mid-single digits, driven by selling more fresh foods and private brand items, Stifel managing director Mark Astrachan wrote in a note to clients following results.
The company benefits from its pricing power and economy scale, as well as tech investments and its $9 billion store makeovers.
Recently, the company introduced a new private label brand named bettergoods, which offers higher quality, trendier items priced from under $2 to under $15.
Its lucrative ad business is also boosting its top line, boasting a 24% increase in global sales, and a 26% jump in US sales.
Earnings breakdown
Here’s what Wall Street expects from Walmart in its fiscal year 2025 first quarter, compared to Q1 2024, per Bloomberg consensus data:
Revenue: $161.51 billion versus 159.58 billion
Adjusted earnings per share: $0.60 versus $0.53
Same-store US sales growth: 3.9% versus 3.42%
Walmart US same-store sales: 3.8% versus 3.45%
Sam’s Club US same-store sales growth: 4.4% versus 3.3%
Walmart US e-commerce growth: 22% versus 13.33%
For the full fiscal year 2025, the company expects net sales to grow on the higher end of 3% and 4%, and for operating income to grow on the higher end of 4% to 6%.
“We expect Walmart US and Sam’s Club US net sales growth to fall in line with the enterprise and for International growth to be above enterprise growth. We expect all three segments to contribute to operating income growth, led by Walmart US, Walmart International, and then Sam’s US,” Walmart CFO John David Rainey said on a call with investors following 2024 Q4 results.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.