NEW YORK (AP) — Walmart delivered a mixed bag in the first quarter, beating Wall Street expectations on profit, but revenue fell short.
The nation’s largest retailer posted another quarter of same-stores sales growth Thursday, while e-commerce sales soared.
There are challenges ahead, however, as Walmart trades jabs with Amazon in a fight to see who can get packages to customers faster.
Walmart launched next day delivery on its most popular items this week in Phoenix, Arizona, and Las Vegas. It plans to roll out next day delivery to most of the country by year end, covering 220,000 popular items from diapers to toys, with a minimum order of $35. The announcement was made two weeks after Amazon said would be upgrading its free shipping for members from the standard two-day delivery to one day.
Walmart and other retailers are facing more hurdles as a trade war with China escalates. It had been left largely unscathed by the first several rounds of tariffs since they focused more on industrial and agricultural products. But that changed last week when the Trump administration slapped tariffs of 25% on imports like furniture. The administration wants to extend the 25% tariffs to practically all Chinese imports not already hit with levies including toys, shirts, household goods and sneakers, which are essential to Walmart. That’s roughly $300 billion worth of products on top of the $250 billion targeted earlier.
“We’re monitoring the tariff discussions and are hopeful that an agreement can be reached,” said Chief Financial Officer Brett Biggs in a prepared statement. “Our goal is to always be the low price leader and we will actively manage pricing and margins as warranted with our customers and shareholders in mind.”
The company said that U.S. sales at stores opened at least a year rose 3.4%. The number of transactions in its stores and clubs as well as its e-commerce business rose 1.1%.
U.S. e-commerce business rose 37%. The report Thursday provided more evidence that Walmart’s efforts to expand online grocery services, including curbside pickup and home delivery, has helped it keep up its arms race with Amazon.
The company has about 2,450 stores that offer free grocery pickup for customers who shop online. It also has nearly 1,000 stores that offer same day grocery delivery.
Walmart’s Sam’s Clubs posted a 0.3% increase in same-store sales.
Walmart is also testing new innovative ways to cut costs and make workers more efficiently. It officially opened a lab in a Neighborhood Store in Levittown, N.Y., that has thousands of cameras that mind the store and help keep track of items that need to be replenished. It’s hoping to scale some of the technology to other stores.
The company reported first quarter net income of $3.84 billion, or $1.33. Earnings, adjusted for non-recurring gains, came to $1.13 per share. That beat per-share earnings projections by 11 cents, according to a survey of industry analysts by Zacks Investment Research.
The world’s largest retailer had revenue of $123.93 billion, missing forecasts for $125.33 billion.
Walmart Inc., based in Bentonville, Arkansas, stuck to its outlook for the year. Shares rose 2 percent before the opening bell Thursday.