Walmart (WMT 0.83%) continues to rack up sales growth as consumers flock to its stores for essentials and non-essentials alike. The international retailer initially benefited during COVID-19 lockdowns in the U.S., where it derives most of its sales, as folks had limited options on where they could spend money. 

Walmart has been able to sustain the momentum despite increasing parts of the economy opening up with the increased rollout of vaccines. The reopening has gained steam in the last few months, and so it will be interesting to see if sales at Walmart were affected. That's why when the retailer reports first-quarter earnings for the fiscal year 2022 on Tuesday, May 18, the comparable store sales figure is a metric that investors will want to pay close attention to.

Shopping carts outside of a store.

Image source: Getty Images.

Can Walmart sustain the momentum?

Walmart defines comparable-store sales (comps) a little differently from other retailers. It includes sales from stores and clubs open for the previous 12 months, including remodels, relocations, and expansions. Since Walmart is continuously opening and closing store locations, the metric will be the most informative for changing customer behavior. 

In the fourth quarter of fiscal year 2021 (which ended Jan. 29, 2021), Walmart reported comps sales growth of 8.6% in the U.S. That is above the rate of growth it expects going forward. The fourth quarter coincided with a surge in coronavirus illnesses, which limited people's activity outside their homes. And Walmart, mostly selling products consumed at home, got a boost in sales from people spending more time at home.

Walmart is guiding investors to look for comps sales growth in the low single-digit percentages for its current fiscal year (2022). That's encouraging for shareholders who might be concerned about sales pulling back after the COVID-19-related surge in the previous year. Still, there is much to be done before expectations become a reality.

Walmart plans to allocate $14 billion in the current fiscal year to increase productivity, build supply chain capacity and automation, and improve the customer shopping experience. Those investments should help sustain sales momentum in Q2, the rest of the year, and over the next several years. Customers are increasingly demanding retailers offer several options for their purchases, including buying online and having the item delivered to their home and buying online and picking it up in-store.  

Results for the first quarter were likely boosted by government stimulus efforts in the U.S., which put more money in consumers' pockets and extended rent and student loan relief. And while large swaths of the economy are reopening, businesses are still faced with capacity restrictions, adding friction to spending. 

What this could mean for investors  

Analysts on Wall Street expect Walmart to report quarterly revenue of $131.85 billion and earnings per share of $1.20. Even if Walmart meets this gargantuan revenue expectation, it would actually be a decline of 0.70% from last year. Such is the scale of this global enterprise.

Walmart has earned that scale over decades of excellent performance and made many shareholders wealthier along the way. As a result, investors looking for a reliable company that can increase their wealth, in the long run, can feel good about adding Walmart to their portfolios.