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Walmart posted better-than-expected results in the first three months of this year, as Americans boosted sales along with stimulus controls.
Walmart raised its annual earnings forecast on Tuesday after better-than-expected results in the first quarter as buyers, in line with U.S. government stimulus payments, squandered clothing and grass and garden items.
Sales at stores were open for at least one year, rising by 6%, slower than 8.6% in the fourth quarter. But that was a 10 percent peak last year when Walmart became a lifeline for the coronavirus pandemic. Online sales rose 37%, down 69 percent from the fourth quarter.
“Our optimism is greater than at the beginning of the year,” said CEO Doug McMillon. “In the US, customers clearly want to go out and shop.”
McMillon said government stimulus money has boosted sales and there is a lot of demand as the nation emerges from the pandemic. As more people attend, Walmart said sales of passenger items and teeth whitening products appear when shoppers remove masks. The company said transactions in its stores rose for the first time in a year.
Shares rose nearly 4 percent, or $ 5.37, to $ 144.78 when trading on Wall Street.
Walmart has been pushing for fast and convenient shipping over the past year and sales in its stores have increased with so many other retailers that need to close on locks. The massive infrastructure put in place by Walmart in recent years has also tightened the frustrations of the orders of millions of people who were sheltered at home.
The company increased its spending by $ 14 billion to accelerate its distribution network, and in February said it would raise its average hourly wage to more than $ 15 an hour, an increase of $ 1.
Amazon and Target have already raised hourly wages to $ 15 for all employees.
Walmart’s first-quarter net income was $ 2.73 million, or 97 cents a share, within a three-month period ended April 30. That compares to $ 3,991 million or $ 1.40 a share in the quarter last year. Adjusted results were $ 1.69 per share. Analysts had expected $ 1.21 per share, according to FactSet.
Sales rose 2.6 percent to $ 137.16 million. Analysts had expected $ 132.16 million.
Walmart said it now expects profits to increase in single-digit highs; previously, the company predicted a small decline in annual earnings.
Walmart still faces many challenges. Analysts believe that registrations for Walmart Plus, which cost buyers $ 98 a year or $ 12.95 a month, are slower. The retailer expects it to be a big competitor to the free Amazon Juggernaut Prime program launched 15 years ago. Walmart Plus delivers 160,000 items to members on the same day, allowing them to see a discount on fuel at some gas stations and without having to wait at a checkout at Walmart stores.
McMillon told analysts on Tuesday’s earnings call that what drives sales partnerships is the collection and delivery of the food supercenter, and the capacity issue. He said right now the focus is on the quality of that experience, not the quantity.
On Friday, Walmart Inc. said it would no longer require buyers or employees with a coronavirus vaccine to wear a mask in U.S. stores unless state or local law says otherwise. It offers workers a $ 75 rebate if they get vaccinated.
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