Walmart (WMT) reported mixed quarterly results on Tuesday, with earnings falling short of estimates as rising costs for food, fuel and wages weighed on profitability even as still-solid consumer spending helped buoy sales. Shares declined by more than 6% i. pre-market trading.
Here were the main metrics from Walmart’s first-quarter earnings report, compared to consensus estimates compiled by Bloomberg:
Revenue: $141.57 billion vs. $139.09 billion expected, $138.31 billion Y/Y
Adjusted earnings per share: $1.30 vs. $1.48 expected, $1.69 Y/Y
Total U.S. comparable sales, excluding gas: +4% vs. +2.26% expected, +6.2% Y/Y
Walmart, the largest retailer in the U.S., has seen sales growth decelerate from a peak rate during the height of the pandemic domestically, when a surge in pantry-stocking and stimulus checks helped boost results. Still, the company has maintained revenue growth as demand remained resilient for the company’s array of products, even as consumer prices have climbed across the country. U.S. comparable sales excluding gas — a closely watched metric of underlying sales trends at the company — grew much more than expected, and Walmart-only U.S. comparable sales excluding gas also grew by a better-than-anticipated 3%.
However, rising prices have weighed on profitability for Walmart, as earnings fell short of estimates for the company’s three-month period that ended April 30. Doug McMillon, Walmart’s president and CEO, cited increased costs for both food and fuel at the company.
“Bottom-line results were unexpected and reflect the unusual environment,” McMillion said in a press statement. “U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”
Walmart’s operating expenses as a percentage of net sales also increased by 45 basis points during the quarter, “primarily due to increased wage costs in Walmart U.S.,” the company added.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.