Walmart’s Q1 2019 Results – Comments

I found various notable items in Walmart’s Q1 2019 management call transcript (pdf) dated May 17, 2018.  (as well, there is Walmart’s press release of the Q1 results (pdf) and related presentation materials)

I view Walmart’s results and comments as particularly noteworthy given their retail prominence and focus on low prices.  I have previously commented on their quarterly management call comments; these previous posts are found under the “paycheck to paycheck” label.

Here are various excerpts that I find most notable:

comments from Doug McMillon, President and CEO, page 2, wrt Walmart U.S.:

Walmart U.S. continues to perform well with comp sales growth,
excluding fuel, of 2.1 percent. Greg and the Walmart U.S. team continue to
strengthen our supercenters. We’ve improved our merchandising in areas
like fresh food with better lighting, an expanded deli offer, and an improved
bakery layout to make it easier for customers to navigate. We also recently
introduced new apparel brands with improved design, quality and value.
Customer experience scores continue to improve as we’ve lowered prices
and taken steps to make shopping with us easier and more enjoyable. We
aim to make shopping easy, fast, friendly and fun for customers, and our
team continues to make progress towards that goal. I continue to be
impressed by the progress the team is making on inventory management.
They’ve put together a string of 12 quarters of reduced comp store
inventory while maintaining strong in-stock levels. eCommerce sales
accelerated in the first quarter with 33 percent growth, and we expect to
grow sales about 40 percent for the full year. Sam’s Club comps improved
5.2 percent, excluding fuel and a 140 basis point decrease for tobacco.
Outside of the U.S., eight of eleven markets posted positive comp sales,
including our four largest markets of Mexico, U.K., China and Canada. So
overall, we feel pretty good about this quarter.

comments from Doug McMillon, President and CEO, page 3, wrt Walmart U.S.:

I’ll start with Walmart U.S.

In addition to comp sales growth of 2.1 percent, more people
shopped with us as comp traffic improved 0.8 percent. Comp sales were
trending higher through early April, but general merchandise sales and
traffic were somewhat negatively impacted by unseasonably cool weather
in April. 

comments from Brett Biggs, EVP & CFO, page 8, wrt Walmart U.S.:

Gross margin rate declined 23 basis points primarily due to price
investments and higher transportation expenses as a result of higher fuel
costs and third-party transportation rate pressures.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2722.46 as this post is written