Walmart Earnings Slowing: Still Seems Reasonably Well-Positioned
Walmart Earnings Slowing: Still Seems Reasonably Well-Positioned
Walmart announced Q1 2022 Earnings this morning. Here are a few callouts:
- eCommerce growth essentially flat at 1% y/y growth. (In contrast, Amazon's net sales increased 7% y/y)
- Walmart US: gaining share in grocery. Basket size is up, units per basket down.
- Wages, inventory levels, Supply Chain Fuel Costs big reason for profitability miss.
- Global advertising business grew 30% y/y.
- Lost big fulfillment center in a fire. Volume spread to stores.
- Walmart gaining share in grocery due to elevated pricing and
Walmart's value position.
- Walmart GoLocal: 1,600 delivery points now available in the US (about one-third of stores - seems like good progress).
US category mix moved to food & consumables more. Away from discretionary.
Some thoughts on the results:
* I would have liked to hear more utilization or customer updates for GoLocal.
* Walmart's recovery from huge fulfillment center fire speaks to value of distributed fulfillment strategy.
* Inflation effects can be seen by basket sizes going up with units per basket going down.
In this type of economy, the learnings are a little bit harder to come by because:
- Each quarter is a little different (lumpy progress/results).
- Focus on free cash flow is generally the biggest lesson. This makes me worry about upcoming Amazon quarters due to heavy infrastructure build-out in the last 2 years.
Usually I like Q&A but I didn't learn much this time.
