WMT - Earnings call transcript Q1 2022

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Operator

Greetings. Welcome to Walmart's Fiscal 2022 First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to Investor conference Relations. like host to now Binder, Dan would turn over the your I

Dan Binder

joined members business Thank to Doug Executive fiscal I'm Vice Walmart's Rob. McMillon, first a you, Good CEO; Chief quarter XXXX morning Walmart's President President earnings Brett team, and our executive and of Brett and In and a update Doug and and will welcome by Officer; including few That you followed Biggs, US. on call. Financial first will and few by session. discuss Walmart the John quarter results. our CEO of Furner, an provide President with be moments, question-and-answer

These Before are that from that I is uncertainties will these results being cause to Doug, the statements. to include and but over and actual to materially today's are and risks limited let statements me our could to turn subject uncertainties our call SEC. statements. call a cautionary with remind in differ and to recorded my risks the you forward-looking not These turn stock.walmart.com. for forward-looking as statements It website factors the regarding our McMillon. Safe over to presentation is our as Harbor on well Please press and pleasure non-GAAP statement slide statement the identified at filings call entire release accompanying reconciliations Doug now review include

Doug McMillon

Good morning and joining today's thanks for call.

year. XX% segments. last strong. with three sales our versus adjusted had in pleased growth quarter We're results for the of were first Our momentum and strong EPS all We performance

the today. deliver strong countries As to our operate are in and the we different the where overcome so the sharing teams pandemic we're it's ways adapting results impacting continues, challenges

it shop. unique others. out it’s all associates their was the customers We having reasons. at encouraging for to impact, continue get than that optimism economic But dedication the clearly our own to uncertainty. signs for our year XXXX serving of want and is also an higher my overall, be is to to In brings challenges we beginning and several US, stimulus the but see of grateful

the presented the despite execution hurdles by improving pandemic. Our is

more year, a normal The half we will our likely have second like uncertainty position. than but

together stronger constant globally traffic eCommerce our points as levels we grow. grocery, will and it whether coming elements how they share We expanding an Our and want XXX continue of currency find stores, eCommerce shop company and capabilities in in sales shop to represents strategy in last over in-stock they are nicely. gained over increase recent when of by of improved XX% divestitures. are decide have will us excluding sales in Key total they order stores basis an XX% acceleration eCommerce grew getting to saw market now Global Customers want an or pick our store, year. ready of and penetration our delivered. to up are

and Looking adjust ahead, cost we'll wages. both whether with chain or customers navigate appropriate and inflationary gaps as mind. supply We'll in that's of our the price challenges monitor shareholders pressures and in goods

vaccinated. US, find engaged to moment. countries. opportunities doses. steps taking of In at also to India, our associates helping to do to so. weeks Chile resources to it get investing South become support the relates primary oxygen more priorities support. as Canada, people several are it In the in some we're to As countries. been but and our we've Supporting countries associates COVID-XX, comes our in and India, When and have focus, the past the Africa millions multiple administered we're concentrators, we're PPE donating everyone challenging financial encourage vaccinated, is we We're our

more can a step and we've incentive to now have added cash associates US mask Given if CDC one been vaccinations. a our choose that vaccinated they as without work to encourage guidance,

Sam's support pharmacies We've and than and we also Walmart organizations are Club we're with collaborated XXX so can to an without the national our appointment. local vaccines more in the US our provide of countries everyone. vaccinations India, our a Flipkart In administering community than them and keep All XXX,XXX across for far. country and places contractors associates to for operate their until PhonePe and we people. Across it's over where and won't pandemic more more looking over households facilitating This difference. we'll make the for events be

quarter. also to a to addition we new pandemic, the the US manufacturing announced combating commitment In during

more Over American metric on create a made the an to purchase avoid this COX goal of next XXX,XXX commitment tons We we've grown estimate items additional $XXX and assembled new jobs the US. set XX billion million emissions. than or will years, in XXX

We also to identify and flourish. That's overcome for initiative why US other together American manufacturing easier partners want the academia to among supplier to Lighthouses. an launching We'll and barriers community groups in the from US we're bring government production. make to called it top-down

over we collaboration a the technologies to these In in expected are by to X-gigawatts and to for we're continue tomorrow. Together We company, energy supplied a This energy the than is ENGIE top hundreds to on globally. of That's to more one generator projects news become more services doing of of megawatts we're work also That's as our the enough share renewable renewable XXX projects XXX,XXX currently three of grid North regenerative facilities through projects. with renewable average stores, exciting the company. American invest wind of and other important adding supply clubs a have energy US annually. example America, year. power distribution renewable power to to separate homes

created Walmart for results team shopped in our for and they strong The as payments about customers US tailwind. online our had stores additional government a and more stimulus talk the our delivered another quarter. quarter. let's Now

being Illinois, and in Texas, impressed California Mexico, clubs They're operating job I've spirit. I comp millions. things our step it. challenges, chain US of the GMV, customer are Our home, stores, and positioning sales advertising delivery Jersey, fulfillment be including had apparel, we're making safely visited of Florida. to for categories is us hardlines parts associates I'm and continue in model. pandemic, Strength Doing a to supply and flywheel at New their across isn't Ohio, the strengthening Each including our we've seasonal. In component Connect all business. Walmart standards, showed is while do Marketplace all good once strong. was and diversifying we strong. and working first-party but vaccinating income with in growth business and XX% position February are fulfill pickup services you X%, retail grateful our to recently also eCommerce built. other they in-stock progress is those DC, easy orders and facilities in they're the the continue were doing Delaware, improving broad-based by better important up serve to strong, but and The and our our hard New as associates our in our

over is demand is smart to more of shop. these previously more with Walmart+ category and Store capacity into investments shared, the memberships, being keys remodels, starts and of strategy an remain which piece of important we capacity This our and As one sales ahead the convinced we in time. selling of first delivery of place to the need ones. top investments We flywheel Walmart+ are people pickup the best fall get of activities. this

through we'll general and apparel and example. and to top technology addition the startup work marketplace grow general of continuously eCommerce a is grow flywheel, a and higher-margin our to merchandise inventory underscores dynamic with room invest business to add brands, assortment capabilities expansion. aggressively. and our in the acquisition business In great The business in combines merchandise We'll our at This the announced categories. fashion fitting of virtual Zeekit desire first-party

customers business associates when and have healthcare. a it a better larger to continue help We to and work and our comes build their health wellness experience

important. Adding capability is step acquisition Our that telehealth direction. in of MeMD big a a was

an and we're Sam's doing wellness as with At omni-channel building core momentum health business. continues. we're retail, the Club, Just

saw increase are member items in keeps strong like are stores and high. business are an quarter associated but back. and and are members. comps like supplies business We helped Categories results, membership underlying our income well membership at and overall for the right growth curbside. as our the an scaling moving adding stimulus all-time gatherings the in strong capabilities is in government Our tremendous for confident in seeing Like improving social our business, We're I'm the activity. and membership with coming strength as counts categories sales restaurant team direction

to Our markets international busy team transitioning the has it's been and portfolio higher-growth working.

ability growth segment's to to And In in by net payment strong last first businesses and Flipkart XXX% deliver XX% key PhonePe These UK, monthly we Flipkart more the and growth year. Argentina. for and sales sales grew a for a versus the results Japan demonstrate declined we for PhonePe as annualized well. and recall, the India customers are we're run divested are metrics remove X.X%. about the recently the and At value result, enterprise. continued good when than total performing quarter, as like-for-like recently basis users quarter year-on-year. net divested the On you'll active markets, rate at increased experience As our

leading online to company acquire underscores announcement commerce. transform recent of travel commitment our intent through customer Cleartrip, digital Our our to the a experience

to us partnership be to as will including base we with data do storage. continue coming logistics of such means to capabilities customers and growing strong and new that. Group announced the Walmex is areas life. recently just to Our help continues need add The flywheel Adani

thanking by, today market. eCommerce delivery new merchandise performance. Our XXX business in quarter. A serve U.S., Results checkout. our and Canada The our the of with increased, strong ways. services than same-day Similar customers. We advertisers. home intensified our the more close I'll our our in progressed. We're Helped fast and voice, of access in confident and customers few sales we're by and us to responding. pressured And plan, and all which year. comp overall provides China, business quarter sales strong in focus is include aggressive We XXX% club grew learn Club moving as number even the to everyone It traditional starts leading during strong to in this that across innovation of our in New for We with speed. members. now business dialing available locations. enjoy and sales up eCommerce being the advertising started note to XX%, XXX% service new adding on restrictions doubled but to growth a than impressive with saw And We're network right top of resonate a serving In their in associates of users uniquely omnichannel from faster, at in quarter existing And phone sales even on new to measures they're areas assets in our categories sales customers more value market services sales increase the future. skills categories, And stores and in on into Sam's from expanding customers delivered all an is Year, data lockdown the our the as Chinese sharpen company. underlying as double-digit business, you edge business areas accelerate move interest these retail. of we eCommerce the to their ones. eCommerce, customers growth this quarter, good, Mexico strong mobile our our to last just new position our growth. the continued towards invest members. data to convenience include in and we're broadband, of certain as Thank for and the bringing we'll In COVID-XX-related model end business on of our the to for strong. were your key

Now I'll to turn it over Brett.

Brett Biggs

the Doug. sales We're results strong strong continued first in profit both, momentum growth. quarter with and business, pleased with Thanks, the and

spending underlying continued strategy. stimulus progress the it's business, as on execute our with see results the we exciting While our omni benefited fundamentals in and to progress

other and continue businesses ecosystem within our margins strategic and to invest to advertising Newer us in services are helping fulfillment priorities. like allowing growing rapidly,

win, to financial the assets, value in do. proposition customer the keeping great competitive a unique put and at us Our center we of all position strength

with grocery options. we're the does in resonate we our provide share to growing market as omni year, and we customers, expected will according to with compared shopping convenience Nielsen. As U.S., to again the Value last assortment continue

results. Now let's QX discuss

lapping up And and international and Canada strength a remains consumables. on basis Gross X%, points margin food improve, provided robust China. stack. than spending, the expected divestitures U.K., the reflecting outlined due year-over-year XX%. increasing key part billion, quarter which the Japan of XX February, COVID-related effect were tobacco. versus up year's consumer focused of grew currency constant fuel initial stimulus at Argentina so on X% last affect more was will phase stimulus. India, effect than growth metrics, stronger on XX% Walmart comp two-year and than while excluding in strong, guidance eCommerce constant comparisons. We mix stock-up today business more comments up trends divestitures. XX%, As last lower than growth U.S. with we've in sales underlying financial Walmart led more to profit by, revenue to shifts increased anticipated previously, focus nearly continuing divestitures sales Sam's we and $XXX more the was sales when comp markdowns to even sales in and U.S., Total in sales spending Globally, in significantly Club and and the with was excluding business underlying currency stock-up stimulus on growth year's strong, U.S. mentioned in the my X.X% benefited

expenses $X Operating loss equity ownership expected, billion points about well partially expense flow year's the company. to Operating of and income international year We investments lower, was incremental up declined divestitures. to As were due EPS repurchase. due adjusted to divested quarter. when levels much businesses currency deleverage. last includes as stock-up with And offset due feel $X.X XX the Overall, constant up increased during stepped U.S., basis I of were was EPS QX in increases on losses inventory net $X.XX The last across of the by though, SG&A versus about $X.XX contributed technology GAAP EPS, wage in-stock lower which basis cash period in share XX% higher resulting pressured $X.XX costs the good in shopping. of primarily a XX%. over buybacks partial the in COVID-related as EPS. was adjusted quarter billion focus our by investments on than

about great We the continue to company. feel the of value

and Now each quarter, let's in results time care. as, a for as spending as in segment. strong transactions, improvements April year. personal the strength aided Walmart reopening categories encouraged for the in in underlying travel, the by We're in solidly trends had such discuss store celebration quarterly positive another and stimulus the business particularly U.S. which grocery turned well by, first improving

excluding increased increase continues share market strength offset shopping SG&A year. eCommerce. two-year expand in an points by versus of was and of Fulfillment more inventory. grocery and according the points triple-digit by sales food lower closures relative up strong from trip were spend strong merchandise to against is garden. up broad-based XX% XX Walmart up also as last to capacity centers. a resulting favorable general Strong and led approximate We're Walmart helped comp across million Connect XX% but categories Margins as last mid-teens declined than growth channels were to with in comps expanded with progress all advertising, in comparison, increased XX%. nearly and fuel strong, deleveraged in shift on expenses costs was hours to reflecting including stores. helped COVID-related improving Nielsen investments partially year's with we growth with technology eCommerce in-stocks markdowns. to Customer by strength X% resonate increased higher-margin Operating and auto gains in mix rate lapping tough uniquely transactions. and nearly low XX%. wage utilize associate basis centers lawn were reduction $XXX growth last we pleased was price marketplace growth stack delivery profit Gross and and Sales We basket of growth and also offer trends quarter. strong two-year the basis stack home on XX%. a for sales The options of store saw the double-digits continue average and led revenue XXX by lapping eCommerce in sales strong vision omni robust continued COVID-related initiatives consolidation were strategy to customers basis year's X% pickup Advertising and Comp Inventory categories income increased as apparel strong, fewer size sales Grocery very positioning, such last reflecting sales effects Services. COVID-related the year. care strategic

on On categories net digital the revenue than to monitor Canada our headwinds in up reach place XXX% to QX, impact quarter fundamentals grew renewals negative industry to a curbside increased rates spending. in strong more apparel beyond. two-year continue affected income with good higher were within our the in the quarter active government X.X% membership a US continued growth negatively including of comps of X.X% strong, made International than business continue all doubling and categories related fuel was this non-essential fewer renewal broad-based overall new eCommerce the than both users up of people sales even the and constant due higher-growth tobacco way. general structure up more Year counts of omni-channel by by comp the stack declined of a the with penetration cases and restrictions leading strength The is continues sustainable in apparel and China later eCommerce penetration. excluding low grew Sam's realignment orders. business COVID challenges and and sales customers XX% profit Strong teams International during and extra plus delivered transactions. eCommerce to challenges, the approximately serve of COVID-related Canada resurgence Currency nearly focus income to double-digits strong continued XX% high services. from billion. Comp of we're basis, profit in resurging top first evident trends about approximately benefited and but were in markets in with against in being improve increasing with of as XX% certain to New XXX strategy X.X% two-year growth. of and for XX% basis We accelerate. more ticket strong increased monthly year the momentum sales at sales on fuel deal $X.X the achieved sales. a currency, and focus in increased addition and than membership strong well China strong time markets including India, part delays and and growth strategy transit and portfolio in expanding to like the continued Clubs rising slightly at results comps to end XX%. and led year despite of stimulus income steps ecosystem, and benefited see and were club. of a result. strength perform many port two-year have customers merchandise. the becoming increased continues and The XX%. growth strong confident pickup of Flipkart advertisers including in taken about more sales the continued XX% eCommerce alternative basis more pleased in first goals and on quarter a sales growth we streams COVID. including strong excluding points has have quarter mitigate home progress sales and but QX with strength across in growth and sales stack mobile up merchants increased as benefited benefit comparison, in and XX% stack. The Comps We're in Sam's in the the to adding Club to tough on driving from GMV to contributed sales, despite expenses. was sales The toward as strategic lead number XX% Operating to eCommerce the India. markdowns growth operating membership challenges were line trends, Mexico margins of the with We to Strength better the Mexico as mix increased continued by markets XX.X%, saw comps the on Chinese to XX%.

Now let's to turn guidance.

improve update typical provided led QX until originally forecast stimulus practice contemplated weren't meaningful higher profit the stimulus guidance second guidance to and than projected year. to be to tailwinds and remainder in primarily sales but that assumes continue an we're strong for for year anticipate here significant packages not Our we release, The to additional full conditions the enterprise due guidance when sales the COVID We the unusual of where initial quarter growth discussed QX. in won't in now there QX is performance our February. government that period

and impact growth raising from better increase of for be consolidated expect original currency impact slightly. is both versus is the reflect than to EPS high-single-digits also On We're prior an operating to to expected. slight strong a income the we low-double-digits, year operating Walmart increase. mid year, full by of to original a the income flat increase for guidance performance increase EPS of, for expectation versus now our Excluding a divestitures, up our income our potentially up our low second and constant full single-digits low guidance by expected increase. guidance is now quarter to to basis divestitures, the in previously sales net and QX to of operating and increase single-digit being excluding consolidated now expected high-single-digits which year US guidance

anticipate low-single-digits now comp our tailwinds divestitures, started continues general gains low-single-digit will second Walmart COVID as originally fuel. market assumes for benefit it to a sales be headwinds to create stimulus The better a and off We merchandise US expect than quarter to certain we share The spending excluding bit continue. business. increase, QX categories grocery continues and both EPS, and excluding up pandemic anticipated

COVID negatively resurgence India in government on particularly in restrictions primarily certain affected and and operations, spending, markets continue by the stimulus by in Canada. cases to aided was be QX US, related While the international

the the continued related we update key and on back original for maintaining crisis business impact year, as of guidance and our health clarity and about uncertainty, strength the time your results global questions. on with half pleased Thank of the very and business. the interest our feel and be Given and potential economy. you Again, quarter morning, to we'd gain we're happy to the their for we'll this external underlying take I'm good the first you variables your

Operator

Thank question-and-answer of proceed with Thank you. At time, we with conducting this your question session. our Short [Operator first be and question. Instructions] you, will Please a line is from Karen the Barclays.

Karen Short

And grocery, Hi. I'm Thanks wanted that and the -- very on you've in couple with I important much. recapturing conference combined XXXX, to unprecedented goals your is, we're presentation. I guess seeing mentioned maybe how what fact respect for cost broader we're asking focus your the that call gaps times a seeing And the is pricing, approach But to that is to because of this what obviously With wondering given inflation? conventional? share a in with guess grocery? I little price that this it differently.

John Furner

Hey. Good question. for John Thanks the This morning. Furner. is

just we're store I'm online, last year in performance to and glad both proud great their food. conditions really year, and in start thank interesting of saying us associates a around they've by improving And with the heels big to a First, the quarter. our on helped of deliver let country, and such an me our team who that done start question. the you job

last with flywheel on of the showed supercenter question food XX back supply quarter, very quarter food. and we and inventory, quarter, a gains that view on And that flywheel is over our the large seen a started price, noted in as is There's is then of progress our of with considering saw quarter the the latter store we that the to saw a the shift. when in journey. improve consumable gains this we're resulted we've are to ensure in the to affected working the will important we've in and These seen the When price And merchants positioned great in the months represented our quarter is share versus encouraging, that our the year to XX perform shift market see at we very of that in Over well time. shopping to we market that. ice months, gaps February, and back hard that the that last food and which continue. part last need business lot customer share -- and the online, it's shifted customers chains; reflection market top that that's performance our our over some the performance late in to were we customers storm in quarter specifically we the which first able and business, of really then, a in your are

our the and always about gains rest the on to many So, of feel the we you considering These market, the on position we'll good on about gaps. feel year. focus have But we that are share the in things good work market. in price how levers merchants continue the and going everything

Karen Short

Thanks.

Operator

The proceed the your Deutsche with Bank. Please with is next from line of Trussell question Paul question.

Paul Trussell

Good morning and strong results.

more if on of a provide bit your second bit a XQ then, expectations. the color little relates maybe it little year. in just year, about the improvement a on dig the how half to little can guidance to as wanted for versus of bit your half you give you're And Just more updated first thinking context

Brett Biggs

you. first quarter understanding the business Paul, got strong I Brett. to we how underlying Hey through we started Good -- Yes, is. from as the and mean, hear is this we

up, February. the as had a weather things admit challenging through you're the it feels with that. we that the because parts of like out But it But some said, we we John that customers stimulus started saw get out we As business went be seeing to of again, is in the going opening strengthening particularly little readily in quarter. certainly, certain back country. are And back

we guidance the and right than that to second did. we different what update go we felt performance. parts the as of strong typically and it we like go in the was time the we So should update quarter, felt then given do ahead seen ahead guidance early And we've

said over out next confident that said anything play back We feel guidance uncertainties point. February all at will than a to like there us my I -- comments, haven't But this themselves I do with half. out lot We months. thing they think of was about of the right and still really updating several the with headwinds, more are did as the in and felt we tailwinds in

Doug McMillon

really Paul, and this how would to excited Christmas do, I buying going what it. Halloween, back-to-school we're with are want get the are is we that add imagine just we a families consistent of in way and when that imagining Doug. to potential Thanksgiving, about

Paul Trussell

Thank quick you. And follow-up. a just really

in margins, Just technology bit about that more strategic little the you on you what was impact digging more investments the talk and a could wage a the made? XQ. Brett, of little just bit

Brett Biggs

Yeah. in talk margin. points. start were mean I margins up I gross with significantly -- basis obviously the about gross mean, I'll I'll US XXX

last really merchandise this strong influenced had against was that general year, you're but sales food quarter consumables. comparing year You heavily the and that very by

we now, we and overall this get gross and certainly the as our increased get focus company knew as cause we still of that specifics deleverage leverage long-term. feel that when to we well. see wage impact. I that increases still year said, But about I the And I investments the get -- increases, I things So primarily into company. in Paul. seeing feel the quarter, leveraging through first tech across did about across won't other from an on good of right but that forward, good it's you're the had that. -- investments investment going us we're discipline expense offset environment you by coming. some did margin. us with the that ability We're glad Certainly, ahead the dynamic wage was It wage cause the

Paul Trussell

of Best you. luck. Thank

Operator

question with line next proceed Our the Morgan Simeon is Stanley. from Gutman with question. of Please your

Simeon Gutman

Good morning, everyone.

So I question. maybe part make I'll have question, it two but one

to And I you and you in how you're is mentioned could visibility in inflection? streams second the into year a sort investing a these your pools some the invest Or rolling? of transcript Can does you talk back there Doug start it business, maybe in more push mentions a and is and of managing of you. if wherewithal more where you little pools. on of Thank at referred giving update Any the in next good or the profit question And growth. part an harder it confidence are gives of it? ahead First, business? profit you point Walmart+? it around Brett about when you're flywheel the on alternative place guess lot fiscal Or capacity you're be at then bit the the Doug

Doug McMillon

go Yeah. Simeon, first. Doug. this is I'll

happening can as Connect John, here As to I'm I'm marketplace. We fulfillment alternative do see that. good. is but this it too. excited as makes strategy before, pools, excited well, said in about markets. performance with us profit it chime into about our you're what's Mexico in have relates services. Walmart this -- visibility happen starting sense to for And And in was strong key you to we've everywhere

us year a February shape, give ago more the P&L even that change room. and to described some So in is than starting we as its does

John Furner

see the months is results we've on about Connect with to is areas a something triple Fulfillment Services; WFS working and know I'll Simeon, expanding hours sellers, sellers been Marketplace; excited out three we the mentioned: that we and a John We have tools and to and optimistic to we helps while. listening the sellers Really My of what are just see figuring need And team That have seller it that we talking on as On all morning, you spent to add. fulfillment I in team demand. add a Walmart to number buyers, Connect like say talked Good and a optimistic we capacity. about And earlier. for to way said this that's unique that the services, platform great ago, about digit growth. with Walmart connect suppliers and there. Walmart. few it's

basically is the So as years. said for in year. the then business their the we last well. growth we this eCommerce We've big quarter, XX% doubled And a top important of number businesses as in had last of couple on

help So that all they're us of with businesses our about going forward. flywheel three those. excited will clearly And

Doug McMillon

this going for be to to executing to press can in the be relates that And from space, ahead the see stores, going plan through is do go that. demand. and In really orders. we're that. And going go year the is top And to automation think well. we'll lot towards And executed. pickup learn had excited stores you're our in and And capital about Simeon the some I we'll it. against to to of stress confident going it's The stores, happen. the end that, it be that, it. kind continue thing, we of getting you team As capacity growth, terms a as of know volume being fast we we of as And stores capacity this very of year for we're is we're that we in And as can is are that putting under have needed. we'll it some delivery expanding in some where starting

Simeon Gutman

you, of luck. Thank best

Operator

Please Drbul is with question next proceed Bob line Our from with the Guggenheim. question. of your

Bob Drbul

morning. Hi. Good

mean, Just a inflation. questions, pricing margin, and and of gross around I couple largely

can little wondered, you're Just side inflationary what categories. different about, if seeing, you talk the on a bit

And balancing mention between did and so customers shareholders. you

just Just offering of could together, environment? you sort examples this focused when few value value of making you're where look on maybe more in approaching on, that? if it versus at consumer, sort wondered, And you're the that progress a give Thanks. you you convenience tying think us how around

John Furner

question. the again. John for is Thanks This Yeah.

with a back supply we're has stock, food. really entire done pleased job team getting the said, we as performance chain stores. great And the in the just First, in including

and make during in to conducive so, said, overnight, picking we those more more capacity so You've got excited stocking of day like where shopping, free can for our to as things we're to up that the that's way do a customer changes Doug the shifting stores, in changes.

in As had had what XX% is we the price ago. far low important. a price about we as a principle that, year than In more we've have stores would gaps, everyday quarter, rollbacks had always here

and are that mix, the gains mix and not meat share that the Some mix food, but happened within the only with pleased important in are bakery. other things in produce the the entire box,

we'll to with the is versus tend pleased gap -- price And have which been the categories positions us better Walmart, they in manage even price mix that the because favorable of able past, we that, kinds continue our to enabling that maintain at within proud to gap. use than mix. the margins, been that to the We're year to all And to year of channels this The gap. categories running. of we've We're years maintain are gaps. prepared be even the expanded the market. the levers So has those more last to we can merchants food

long that sure could customers. do is ours convenience eCommerce we Connect, mentioned and forward stores the be channels than pillar an Our Walmart make right manage -- time. very it help merchants year, eCommerce for mix then we will profit additional been to has for to I just value across important of important have with the you first-party, but and third-party. that finally, with with revenue agree fulfillment services the a that, more from gap with business us And can last the value marketplace going streams

Doug McMillon

Club early 'XXs. conversation reminded, applies Bob, This to it in in the It international Sam's of related I'm described, rollbacks mentality underline. applies a that well. to is in as John important

price beauty we've levers an fulfillment me now places end Walmart can things said, I and misheard room the him. got a day." in And go you quickly able profit our mix thought few to to other with find with of place differently do the month. be eCommerce these marketplace by "We're the bring us on them people that's lower it. all the and How to I and need and Connect, of of do profit? reductions put I doing assistant buyer short into And supervisor to As supercenters. food than and my are in for the retail find walked and that you these upstream you to prices And increase of and services number all

have for example positions place in XX% in really us more well. now to right So rollbacks U.S. Walmart

Bob Drbul

Thank you.

Operator

your is next proceed line coming McShane with Goldman Kate Sachs. from of Our question question. the with Please

Kate McShane

was you. XXXX know was that taking manage, that given Hi. I my demand. strong Thanks mentioned Thank during an for to question. you that hard area the in-stocks,

inventory Just wondered, are currently within areas of still are Thanks. or you're to categories back? that working there build your light any

John Furner

then better things We're those like react. they we But where compared ports stock-up we chain storm which and bicycles, challenge, the to we'll Hey. our in related just chain. in demand and quarter, things the inventory good flow across to from supply the have been of all supply we Good some ago. monitoring felt to still bit this a adult a mixed. supply I Early consumable comes to the we general, and stress categories record phases, question. into the year thanks pandemic. were we we're all their it would continue then had continue many the put morning delays we at was moving things cases, got a making then were progress food we with pockets to people and in like in challenges general general speak in chase XXXX when Certainly, merchandise of that days the our there phase as In and some for on quarter, improvements watch some It's in through for a pockets closely factors been has demand went business to all ice even and as the some certainly number are like merchandise later see electronics. what pretty where today. And to had chain. few a consumer definitely And chasing into that we closed home locations other but

Kate McShane

you. Thank

Operator

of Peter Our next with from Baird. with line your question question. Please Benedict proceed is the

Peter Benedict

morning, Good a had Hi. just for question on US I guys. maybe John. eCommerce

pushing on But home thoughts of there delivery pickup on market kind And curious you're micro fulfillment home Just to of just you're also delivery updates. center of side how just tests fulfillment And any kind the obviously, approaching curious just activity of the your continues scale. just that. on or Thanks. maybe what eCommerce? front the your

John Furner

comes and stores. to when something on been question. it In we improvements online working picking Peter. for than the from tackling Thanks have slots year and scheduled And capacity and Sure, utilization and pickup have managed growth delivery that's available Sure. capacity we we been now. call general, that for for some things time more things like for we've It last slot orders what available we we accelerated slots had. or ever have

call what -- think We items way I'd And Walmart ship into also our things number expanding to there. we have I stores are where refrigerator. we capacity and from and from the one, that's the leads say a at to store home. couple we another all is deliver in-home the home, including your which part question delivery our or of the which And more the second the in we other market just in-home up which picked food services, of

about. We you have our asked fulfillment centers that market

that have We construction. in are several

expect We QX or be launching to late those QX. early either

such curb home first a a deliveries of at opportunities to delivery to able do vans people mile home that their flexible they at to So and We be we're finally, Walmart-branded we'll launch. business. those wanting But serve was shifted see want lot store. it's lots been once excited about in serve want in were there to then extremely talk here of the it's have that we last shopping and we pickup. And to more operating our we in go customers our able Last be to and store, learning about that are forward. in customers as want. be Arkansas We've market or way any are it's from whether shift at they year a

at-home improve. But out. to either of deliveries, that direction. as we'll there earlier ready should a balance the assuming pandemic continue And alluded change I more this in and Brett what that's conditions year the back be be pickup get people to in-store between see think shopping we'll as is

Operator

with Michael Our next question. question is the Please line your proceed with coming from of UBS. Lasser

Michael Lasser

my script? spending. due quantify to for comments made you that increase was taking Can Thanks who guidance a question. lot in was the the of mostly stimulus-related morning. the Brett that noted you One two Good from

two noted important parse out the what stimulus? you're And overtime. results driver you the XQ and do expecting in how impact that an of XQ Doug So from the is Walmart+

and you you should it here? give how So that us so stands much. program can from Thank for sense unfold today a where

Brett Biggs

is Hi, you. of script that Good I the Michael. we're is quarter. feels underlying I things results stimulus can the quarter. This good part you But in how it. mentioned first and also a a increased to in from business we various of about mean, the second benefited the Yes, of couple more ways in optimistic Certainly, hear Brett. our sense get

was and guidance quarter. original how the what know increased You we guidance the that for

about stimulus economy see you are merchandise of the the general up particularly that of to you because should that tell stimulus benefited is of by little it challenging of of out bit benefited impact pick opening thinking underlying on we're a side. types sense categories So business. though see the versus the categories by stimulus how give the you I also exactly can you

a challenging through more it makes it to So little pick that.

Doug McMillon

time program on And number one driver said selling and a is we inside is grocery our for as pickup said some our to us. capacity. is to The memberships Walmart, in as of And We issue before experience We there. delivery. supercenter quantity. new Michael, want on this NPS. the quality that not February, work build the the membership is we of on focus want capacity

the stores With and other at will things the marketing improving many these for the other all we all with be don't moment growing kind just primary Walmart+ it on. stuff are that But -- traffic opportunities. that program think long-term to us and of focus us. and should important be We we gotten so we've and marketplace eCommerce going in

point it. memberships about it. that know of At we'll more So much sure, we'll request information for share some these keep and and I talking there's with people a guys I'm services growing because streaming about are how some days. you subscriptions

that's how that's if but – know want add to feel don't about right now. it John, I I you So anything,

John Furner

that and locations for use thing we able I to we centers work more the can the that people. be network on completely doing market to creating be have got begun really stores algorithms right is other fulfillment use capacity and able where big lot going of agree. supply on serve to would inventory Yes. work the We've across to And all spokes. we're to encouraging able pull us chain and as hubs be a serve help from

few that just strong. encouraging to in only gone has have results months capacity fulfillment stores has but from not centers last the been So has eCommerce delivery the been from delivery been up, strong, see strong,

foundation be we're we capabilities great a this in forward. program So putting these move will for as place

Doug McMillon

about forms. helps relationship important takes example be large year retailer delivery last digital I with Overall, pickup expansion particular the us happened popularity; and various think the areas. with with in what that a for which seen really app in of and good is digital helps happening data customers those We've with and future. app downloads and what's the the we us a in feel number relationships, of and

John Furner

more able will with effectively them of life and customers and out improvements that and things and are we'll Yes, those Zeekit like them. because relationships, its things working I Acquisitions their like to the make believe to other in friction for core connect will grow Walmart be with MeMD the and improving take be to continue technology. help more simple experience. We're ways also app in able on

Michael Lasser

Very you helpful commentary. Thank much. so

Operator

Proceed Our Wissink from next Steph with question your Jefferies. is the with of line question.

Steph Wissink

We everyone. general had on merchandise question morning, Good a improvements. you. Thank

some time give talk about merchandise. like you lot You've I'd to talked a general to food, about but

new there. in brought You've talent

strategic some made tuck-in well. some You've as strategic acquisitions and partnerships

should terms you us you're tie for be learning from well, might some some of looking what driving that on as your initiatives And to your Thank merchandise? about in-store growth marketplace you. of progress So decisions back maybe in that merchandise? of help general could digital we if think general what your around around be

John Furner

Sure.

excited that Let the general in one. again. This quarter. is We're John, about merchandise the me in performance really take

were then give make the as and last XP. in-store. buyers channels you all customer that category that our we across channels. spent last change of now the because all we're teams over As changes when all July determine we you time together. have store, And programs through had mentioned, people what's year. the did right thinking specialists in what's I'll talent them And what we has biggest had a the Or and to we with of traditionally team relationship and a XP of assortment was of on then goes online And to number were merchants pulled referring the we called merchants lot working an example. in the the And

Nordic what's that doing makes week, went our I last suppliers, Minneapolis here then cookware catalog marketplace. Just visiting the the of who And United they the was in entire have improve? available one And to their what's in Ware well, in stores, is going through of number in States. we items

way categories manage the like some about customers serve frictionless Walmart, all talked travel customers Brett customer are country. improving changes. our that to levers a with lot to channels assortment way a that's at that just due the But able kick really in. look across back very be so them merchants it were And quarter, with also shop, able gives the definitely you across care, earlier, the behavior in and tell to is going clear. what's and at partly stimulus, personal to And the categories changes can more in saw selling about the when to but you starting we

and more definitely saw and see people. going behaviors back out getting are that So up to reflect starting opening we to

we with Our with then the on. extremely changes And the of but helpful in in health the quarter. watch last to business customer and as the some some continue that continue, could the even been administering moves of vaccines expect wellness changes that of year in has we'll week, millions these

Operator

Thank you.

of Please question. is with Edward line next proceed from Our question the with your Yruma KeyBanc.

Edward Yruma

you that changes any within are either you as Thank store seeing pickup -- improves positive favorable on to business eComm for begin saw When taking improve, know And as or traffic traffic the you some the are a question. Thanks then any you commentary that I noticed you. mix you traffic, really inflection. Hey. shifts? or other delivery? very see follow-up, seeing an April Obviously, that noted store

John Furner

food definitely when started goods consolidation, in probably was inventory a the what and count fewer stock-up traffic, For March we changed year of did of it and said, stress consumables. store, where happening big to of bit. late and and we strain trips the traffic on big and trips things cycle paper a and April, put the lot That's in as some last really like

would the gains sheer shift began and So food the not this categories. occur year we to to begin -- as that reflect in saw numbers

frequency last a combination of within was comparison people strong of but back think year, I also of that's it channels, to in purchased, growth three. between specifically out some getting food all normalization in terms

said, we As the mix of of pickup. inclusive centers to XX%. in including US, growth is comp eCommerce being of, was then X%, stores fulfillment And people's shipped growth total a eCommerce or from what's homes the and

eCommerce. about to we're we And of have ship We're about amount then, We're home. continue first-party Finally, invest slots continuing expand stores forward in excited in for and in the I'd capacity work the expansion people's to to capacity channels. we just available have of shopping for all say that supply going stores. the pure in more chain to to excited capacity

Operator

Thank you.

line your of with proceed D.A. from with Michael Baker Our next Davidson. Please the is question question.

Michael Baker

Thanks guys.

gross if on follow-up is And just much One, Just XXX is I second margin the can of the being or how And how businesses, then, the maybe parse basis could. the by from question, exact if alternative much two so supported from comp the you just to points that and general the sort coming directionally. and then strength guidance. mix not, an improvement, out? follow-ups, merchandise quantification in

full comp, correctly, didn't quarter Yet the first understanding is up. expected, better guidance So, change. was year than if I'm second it quarter

Or we – So, low-single-digits wide It change early in anywhere I back pretty is Or or is too a something and between should half? X%. X% -- be X% into read to the suppose. decline a it? could that just range

changing So, into you. what we the not year full Thank do guidance? read that

Brett Biggs

when you guidance. ends the on big numbers I fairly Walmart with the said Hey, second the is start a it on I that wide really What -- you range. is appreciate a range. the low-single-digits think about Yes, wide this is it's up US, question. comp -- of it the wide range at in look Brett. case, at a one I'll And being

strength sales the So, I'll we've merchandise said. the pretty quarter We I first anything consumable from year great also, when several the last fewer gross that really out margin. well that strength seeing of quarters, can quarter had you On saw see second start over course, about general seeing versus into The biggest for that started feel first come benefits read -- the of we're in. in wouldn't general as start. year was that. change gross which we lot John and strength last margin, that add-on say There's this markdowns. we've a you the the merchandise, And quarter. come in you

John Furner

Yes.

bit what a Last stock-up year. were the was in talked have would balanced began. food general heavy than items on was margin Let merchandise to year and last me the we Certainly, really more just quarter. And seen this grocery strength pandemic in question. food. add we there the We year, strength in as about the in dry

the in the food, fresh share grocery, first quarter is helpful. that leading areas bakery produce, meat we and specifically, gains saw and strength the most certainly but So, in in

The third point the I think of at is I'd quarter. positioning end make inventory the

inventory Last inventory level feel been position. is thing. about is in we so disciplined inventory in general we've up good big that Brett is we're end-of-season and better clearing our about as -- mentioned, Brett Our and seasonal. clean and our had ensuring year up, stock-outs merchandise, I much really which a grocery

the the merchants we the to drivers been Having is, contributed rates eCommerce So, drivers position what which having thing in profit remit eCommerce, strong. would have would Connect, great channels of is include I say category given of and feel helping the like wants And the last rates, then, contributed with things customer et all in profit cetera. the of their there. Walmart

Michael Baker

Thank Great. you. that I color. appreciate

Operator

you. Thank

is Our question. from line next proceed with of Capital. the your with Kelly BMO question Bania Please

Kelly Bania

questions. merchandise. little and Also good for bit to morning, our taking on touch wanted a thanks general Hi,

with -- growth. in so XX% with So the U.S. low

fulfillment think rough there. were We gained share how thinking is estimate. merchandise services thinking also maybe and you're XX% are you with maybe growth, third-party that? curious growth? if how Walmart which your general efforts measure But market your about market curious you you just Just how to And that, contributing

John Furner

is This John.

think first. Let for performance share year so question The is general March. to in last manage it and me about take merchandise your February arrear our first we we flat data and in a is month

Certainly we of the general on two-thirds the you the quarter. across feel first the XX% through as about merchandise in range. So good said strength performance saw

things categories like and categories about Certainly going we've quarter good So about I a we versus and positioning ago. think we're positioned of chain. customers got year. a all services, again fulfillment we mentioned and to your Particularly demand things home we're being in-stock the most quarter. the this excited the as stores. coming well. and second seeing Feel of second be stresses and and good into capacity in the are have in in feel some apparel on we're But share including open demand like and number where business is in carefully as high then supply about move performances chain I supply the by across select year ready think and online earlier where in in up, watching had that other encouraged part But the tightness improvements important that the we for the the we've fulfillment forward. travel centers improvements question the able is And the

So have sellers. customer we're excited the the our for and will about for not only the those also but top line impact on

and Our enable businesses sellers growth. are looking small great for for a it's more to ability and to way ship services

fulfillment our we'll year online So as on, more for more goes see business. come service the and capacity

Operator

Scot is Ciccarelli question Markets. next Capital RBC with the line from with question. Please of Our proceed your

Scot Ciccarelli

structurally regarding attributable able the is increase a that given you I profitability scale run you were of rate on eCommerce question how what last operation My color is that growth garner and more U.S. related increase to guys. the much morning Good updated today? was assume the any to wondering, EBIT profitable year? eCommerce saw. that of And I'm would to

John Furner

John. is this Scot, morning Good

Specifically on and which of less rates question eComm shipping. good margins that about would is on be drivers feel profitability, contributed we cost eComm, gross of the the profit your the

services. are really feel demand triple-digit have and the revenue marketplace, streams included we're about said in capacity in proud fulfillment I growth we that expanding know of also Connect. things we're the We good the earlier, Walmart which we eCommerce, alternative are Like like seller

So all eCommerce together are P&L. in the helpful of added those

breaking we in it the difference omni eComm business. has an are as the blurred become stores breakout, out On we so because transition actually not and just to

centers. as and some have as cases by act fulfillment merchants channels acting pickup Stores are they that our overseeing are stores, category. all centers in We

go as at then store and to ship We have which times fulfillment put last network. got they to centers our acting home. -- inventory so the direct mile with an into be fulfillment order they consolidated centers a And can

they're within rates are doing possible profit the just break and categories only things, us to but within out improving great doing the not mix general mix say like team contributed the with contributed come. other they're But for profit just business the merchandise doing I'd within not versus it's great how rates. -- job a So blurred those a overall, given -- lines have the job the

Scot Ciccarelli

Brett. Thanks, helpful. Very

Operator

Chuck Gordon next is from question Please with question. Haskett. proceed with Our Grom your line the of

Chuck Grom

April in we same amount? therefore are spent great the could in how how a coming macro you for they pent-up Are the and most demand they of the and look some more recent contrast allocated morning question year. is quarter saw compare seeing of you stimulus to allocated I'm this me. Or at that late and spending More Hey, the good and consumer When months? December these there's curious past get and savings still here. to see checks, data what

Brett Biggs

to seeing customers to Yes, definitely as you're you year. think good. are good. I both. demand rates we're are lead of pent-up which out I Brett. be there is this half Chuck, are believe the at the we an high Income bit rates get Spending some rates seeing almost to again. spend all-time But still that Hey a savings would is going get back little and of actually mean

in as it's COVID, So by that as consumer balance in industries consumer you're the balance ways is impacted lot really of were a sheet unless about been. strong certain the sheet,

that's either the that of demand the into due stimulus indicate Now economy the a in gone lot coming. that's money would to there's But way. some case it

Operator

comes from line with Please Robby proceed question. your the Our America. of with of next Bank Ohmes question

Robby Ohmes

you omnichannel accelerate what to maybe even that's that playing like could you and involved been what health guys? the that's on look I guys. Hey, going Anything dream And like? going and out? Can for you how omnichannel good health care pharmacy ultimately mentioned the current wellness recovery, remind morning guys Doug, know everything. vaccines the business. with us you have

Doug McMillon

then in jump I'll can first John Robby and Yes. add.

really does helped like remarks lot. destination together look I everything these and and is ultimate an shut an Optical doing. everything MeMD. all while. to earlier considering and destination our think our doing. I for though has back performed mentioned the the pandemic businesses did well The pharmacists omnichannel have with mentioned my incredible We since pharmacy John vision a services in been that including a historical leverage they've that of have down It's that challenge those been digital new vaccinations done do the they're front-end where we'd centers to that's business started, healthcare open with

them health able future think devices and of their types care what You to be get in their need they where terms services much they eat reach they and of how their to healthcare homes they we'll can imagine a what customers then help where on move in about them.

think an really a outcomes-based to capabilities I more access great served with care of a a building can you good well end also system, need serve large see that fits accessibility and business so, food have And that would to that together up lot healthcare us retailer. together people of and value, help be with those people

on see CareZone capabilities that if of And acquisition, pieces. strategy executing acquisition our so we're the some been you this just latest we've to us through the adding at in back own. look you those that building And MeMD, working can addition

John Furner

ahead. and Yeah -- would I just add go

Robby Ohmes

this is as to Walmart+ with longer term going that just was fits something I ask in well?

Doug McMillon

We'll to on get that you Robby. back

John Furner

solution John. is omni-channel customers health I for excitement just to this care and Walmart an the want Robby, of idea reiterate for together.

here Doug to and walk the the now jumped then encouraging. as had given to delivery, seeing offer. and country year get service the very that pharmacies last be and We're clinics said, in We've of performed the year. entire prospect clinics up been Our teams just fill a open is and we well helping challenges I a last locally they've help part up large vaccine that store health opened excited market course We They've got industry changed different care last year assist all the opened continue able curbside then pharmacists faced. It's have of by And to number very to bring. to and people in with delivery and amazing. their a cost has And ways the shifted clinics. in number home. a was of our pharmacies about embraced digital suite but efficiency that. night last on nothing vaccinated they found the the get of our way and state, central of short

prospect with and a really enable and to execute So exciting of forward. a the flywheel this acquisition big device, to pharmacies home able care our relationships of in MeMD of and their service it's on customers with is their our backside part on be clinics going that

Operator

our the question-and-answer time, to the At end Doug And session. turn this Thank you. back we've of I'll reached for closing floor remarks.

Doug McMillon

building of strength following Just in close saying the got company closely. thank the want to by tailwind all so to see can in you for US we've to that you that addition the you company. Hopefully,

weeks deal we And But working. the grateful own Brett India mentioned, is strength to is the the be as about hotspot aside, there fundamentals, And improving, Judith Sam's support is and more stores folks, with quarter pandemic underlying doing during quarter brought. are only got other the the company challenges our improving I team also metrics, And of the International that the excited adding. really we'll a those. The stimulus economic against we're we've aside, this countries been this standards that against the best making portfolio have As virus situation as International. we'll obviously work the while and and had good the had Thank has last capabilities that of change in in input because I'm with great country And and and I'm and but cities the future. We've that. one can and I there's ourselves quarters the momentum And Club. in a lot in in-stock's not was lot in much pandemic and a the our over. there in the you get changed progress try not that real focus is pandemic through all. sure we on will to see coming. a team coming tragic

Operator

conference. concludes This today's

your your disconnect at participation. may You lines time. this for Thank you

Walmart (WMT) 18 May 212022 Q1 Earnings call transcript