Walmart (WMT +2.15%) is the world's biggest retailer, so it isn't a shock to see some head-turning operating metrics related to its $500 billion annual sales haul. But the first quarter of fiscal 2021, which ended May 1 and includes the start of the global COVID-19 pandemic, still stands out as one for the record books.
Let's look at some of the incredible financial details that came out of that report.
10%: Comparable-store sales growth
Comparable-store sales, or comps, jumped 10% to more than triple the change from the prior quarter. Before that, Walmart had noted that its 3% increase through most of 2019 was its best result in over a decade.
The COVID-19 pandemic blew past that record and helped the retailer add nearly $11 billion in incremental revenue in just the last three months. Management said they saw "unprecedented demand" for products ranging from food to general merchandise.
Image source: Getty Images.
16.5%: Change in average spending
Walmart saw a significant decline in shopper traffic -- down 6% -- but made up for that drop by attracting higher average spending. Customers spent 16.5% more per trip to the store compared to a 1% uptick in the prior quarter. That change was driven by the desire to limit shopping trips during stay-at-home and shelter-in-place recommendations around the world.
74%: Boost in e-commerce
The digital sales channel rose 74% as millions of shoppers tried fulfillment options like home delivery and in-store pickup for the first time. Before the pandemic, management had been predicting that this segment would expand by around 30% this year. It's a testament to the business that Walmart could handle a doubling of that growth rate without sacrificing service quality.
16%: Adjusted comps growth at Sam's Club
The Sam's Club division enjoyed a 12% comps increase that rises to over 16% after adjusting for the loss of tobacco product sales. This segment attracted plenty of new shoppers, too, with customer traffic soaring 12%.
Members were happy to turn to the e-commerce sales channel here, too, with digital revenue jumping 40%.
$755 million: Extra labor costs
Walmart tallied up the costs from all of its extra support measures for frontline employees who are risking their health and helping the company maintain selling services through the pandemic. The total cost in cash bonuses alone was $755 million. The chain reported several other increased costs, including sanitation and safety measures.
These financial stresses reduced profitability slightly, with operating income landing at $5.3 billion, or 3.9% of sales, compared to $4.9 billion, or 4% of sales, last year.
$7 billion: Operating cash flow
Walmart doubled its operating cash flow to $7 billion, which yielded $5.3 billion of free cash flow compared to $3.9 billion a year ago. That success implies plenty of flexibility for management to keep investing in growth areas like home delivery and an expanded online offering. It also means the retailer's dividend is safe despite nearly $1 billion of extra costs related to COVID-19 to date.
Management is still taking a cautious approach to the short term. Walmart reduced capital expenditures during the quarter and dramatically scaled back on stock repurchases.
And, while citing the uncertain economic recovery environment, the chain withdrew its fiscal year outlook while predicting a challenging period ahead. That likely means weaker growth results for the rest of fiscal 2021 than investors saw this past quarter. But Walmart has still demonstrated its status as an essential shopping outlet through the early stages of the pandemic.
