By Sarah Nassauer
Walmart Inc.'s sales continued to rise during the spring quarter
though at a slower pace than earlier in the Covid-19 outbreak, as
some consumers returned to more typical shopping patterns and U.S.
government stimulus stoked spending.
Comparable sales, those from U.S. stores and digital channels
operating for at least 12 months, rose 6% in the quarter ended
April 30 compared with the same period last year. U.S. e-commerce
sales rose 37%. It was the slowest online growth for Walmart since
the coronavirus outbreak in early 2020 upended the retail
Sales of nonfood items jumped more than 20% in the quarter,
aided by government stimulus checks as customers splurged on
recreation, home improvement and apparel items, the company said.
Grocery sales fell compared with the same quarter last year when
shoppers hoarded some goods such as food and toilet paper, but the
retail behemoth gained grocery share versus last year, Walmart
"Our optimism is higher than it was at the beginning of the
year. In the U.S., customers clearly want to get out and shop," CEO
Doug McMillon said in a release. "Stimulus in the U.S. had an
impact, and the second half has more uncertainty than a typical
year. We anticipate continued pent-up demand throughout 2021."
Stimulus-related spending has continued to boost sales at the
start of the current quarter, said Walmart Chief Financial Officer
Brett Biggs. More consumers are shopping in physical stores than at
the start of the year and buying products that indicate they are
being more social, such as travel gear, beauty products and teeth
whitener, he said. "You can tell that the masks are coming off,"
Mr. Biggs said.
During the same quarter last year, Walmart's U.S. comparable
sales grew 10% and e-commerce jumped 74% as consumers
Overall, Walmart's global revenue rose 2.7% to $138.3 billion in
the April-ended quarter. Net income decreased 32% to $2.7 billion,
including losses on its sale of its U.K. and Japanese units and
adjustments to the value of its stake in Chinese e-commerce company
Shares of Walmart rose about 3% in Tuesday morning trading. The
shares were down slightly year to date, compared with a roughly 11%
gain in the S&P 500 index in the same period.
Walmart and other retailers face rising product prices, worker
shortages and new consumer trends as pandemic shopping habits
evolve. April U.S. retail sales were flat compared with March, when
retailers benefited after shoppers spent government stimulus
checks. Restaurant sales rose in April, while sales shrunk in a
range of retail store categories including furniture, sporting
goods, clothing and general merchandise, according to U.S.
That could leave a smaller sales pie for retailers that sell
Home Depot Inc. said Tuesday its comparable sales surged 31% in
the quarter ended May 2 compared with the same period last year.
The company is capitalizing on unprecedented demand for
home-improvement projects. Department store chain Macy's Inc.
reported a jump in quarterly sales and swung back to a profit from
the year-ago period when many of its stores were temporarily
closed. Compared with the same period in 2019, Macy's comparable
sales fell 10.5%.
Macy's CEO Jeff Gennette said categories that were dormant
during the pandemic have begun to show signs of life, including
apparel, shoes and handbags. Mr. Gennette said luggage is one of
Macy's most improved categories, signaling consumers are ready to
"We don't believe this is a short-term pop," Mr. Gennette said
on Tuesday. "This is momentum that can sustain us in 2021 going
Mr. Gennette said that even as the stimulus spending wanes,
shoppers are continuing to buy clothes, especially for special
occasions like weddings and proms. He noted that sales of black
suits for men have tripled since the end of last year.
Meanwhile, Walmart's principal rival, Amazon.com Inc., continues
to grow sales and profits rapidly and hire thousands of workers.
The e-commerce giant recently reported record quarterly profit with
revenue rising 44% to $108.5 billion. Its results are bolstered by
large cloud-computing and advertising businesses.
Walmart is spending heavily to continue to grow online and
diversify its business to include healthcare, financial services
and advertising, hoping to mimic some of Amazon's financial model.
In February, Walmart said it expects $14 billion in capital
expenditures during the current fiscal year, up from about $10
billion last year.
On Tuesday, Walmart raised its forecasts for operating profit
for the current fiscal year and said it expects U.S.
comparable-sales growth to stay around a previously stated range of
a low-single digits percentage.
Workers are also in short supply.
Competition is fierce for hourly workers that retailers rely on
to staff stores and distribution centers, even as unemployment
rates remain high compared with pre-pandemic levels. In recent
months, many companies have announced a raft of new perks and wage
increases meant to attract workers.
Last week, Amazon said it would hire 75,000 more workers and
dole out $1,000 signing bonuses to some. McDonald's Corp. also said
last week it was raising starting wages for workers in its
corporate-owned restaurants to $11 an hour. The fast-food chain
said it wants to hire 10,000 people in the next three months as it
reopens more dining rooms.
Earlier this year, Walmart promised some workers raises and said
it plans to move more workers to full-time schedules with more
predictability. Its starting wage is $11 an hour depending on the
Walmart likely got ahead of some of the strain on hiring with
earlier wage increases, said Mr. Biggs, Walmart's finance chief. So
many businesses are now hiring at once to meet demand that adds to
the challenge, he said. "You are always going to have hot spots and
we'll deal with those market by market," he said on Tuesday.
Macy's said a tightening job market has led to a higher level of
open positions across the company.
If retailers can't hire enough workers they could struggle to
keep up with continued demand for pandemic consumer favorites such
as homegoods. Even as business ramps up, some restaurants and
retailers are cutting hours due to lack of workers.
--Suzanne Kapner contributed to this article.
Write to Sarah Nassauer at firstname.lastname@example.org
(END) Dow Jones Newswires
May 18, 2021 10:55 ET (14:55 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.