Walmart's first-quarter net profit fell to $2.05 billion as rising costs eroded profits!

It is learned that according to foreign media reports, Walmart announced its revenue results for the first quarter of 2022 on May 17. The report showed that the company's revenue this quarter was US$141.57 billion, exceeding expectations, but its net profit was US$2.05 billion, far below expectations.

Chief Executive Officer Doug McMillon said: "The main reason for the erosion of profits is that the continued high inflation level in the United States, the rising prices of food and fuel, and the obstruction of the global supply chain have led to a sharp increase in its operating cost pressure and a drag on profits."

In addition, Walmart Chief Financial Officer Brett Biggs said: "Sharp increases in fuel prices, rising labor costs and aggressive inventory levels have put pressure on the company. Due to the unusually cool weather in the United States, some summer goods have been delayed in arriving, and items such as grills, plants and pool chemicals were not sold, resulting in the company's profit being lower than expected in the quarter.

Here are Walmart's first-quarter business highlights, according to the report:

• Total revenue was nearly $141.6 billion, up 2.4% year-over-year in U.S. dollars and up 2.6% year-over-year in constant exchange rates.
• Walmart U.S. same-store sales increased 3.0% compared to the same period last year and increased 9.0% in two years.
• E-commerce sales increased 1% year-on-year and have grown 38% in two years.
• Membership revenue increased 10.5% year-on-year, and Sam's Club sales increased 10.2%, an increase of 17.4% in two years.
• Walmart International net sales were $23.8 billion, down 13.0%, or $3.5 billion, year-over-year.
• Global advertising business grew by more than 30%.
• The combined gross margin decreased 87 basis points, primarily due to a 38 basis point decrease at Sam's Club and Walmart US.
• Total operating expenses as a percentage of net sales increased 45 basis points, primarily due to higher wage costs at Walmart U.S.
• Total operating revenues were $5.3 billion, down 23.0% year-over-year, negatively impacted by $0.3 billion in divestitures.

It is learned that in February, Walmart had expected profits to grow in the high single digits in 2022. However, in view of the current severe situation, Walmart lowered its full-year profit forecast, and it expects its revenue to fall by 1% this year.

Editor ✎ Nicole/

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