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Walmart’s US Business: Record Comps Growth

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Record comps growth

Walmart’s (WMT) US business had impressive comparable sales growth in the first quarter. The segment’s comparable sales have increased for 19 consecutive quarters. The performance is impressive amid heightened competition in the domestic market. The traffic at Walmart’s US business rose in the past 18 quarters. Walmart’s US comparable sales have grown more than 3% in the past four quarters.

During the first quarter, Walmart’s US segment’s net sales increased 3.3% YoY (year-over-year) to $80.3 billion. The comparable sales rose 3.4%—the highest first-quarter growth in the past nine years due to 1.1% traffic growth and a 2.3% increase in the ticket size. E-commerce sales contributed 1.4% to the comparable sales growth rate.

On a two-year stacked basis, comparable sales rose 5.5% due to 2.5% traffic growth. Walmart’s comparable sales were impacted negatively by the government’s early release of SNAP assistance. However, the company’s sales benefited from Easter holiday sales.

By merchandise categories, Walmart’s grocery sales registered a mid-single-digit increase, which reflected higher sales in the beverages, pet, and food and consumables category. Omnichannel offerings, value pricing, and growth in private label products supported the sales growth rate.

Comparable sales in the general merchandise category marked low-single-digit growth due to Easter holiday sales. The health and wellness category reported a mid-single-digit increase in comparable sales due to higher prices for branded drugs.

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Outlook

Walmart’s US segment’s sales are expected to mark 2.5%–3% growth in fiscal 2020 excluding fuel. Sustained traffic growth, value pricing, and omnichannel offerings are expected to support the top-line growth rate. E-commerce sales will likely contribute meaningfully to the company’s comparable sales. However, tough competition could continue to have a negative impact on Walmart.

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