Retail behemoth Walmart (NYSE:WMT) reported Q1 CY2024 results exceeding Wall Street analysts' expectations, with revenue up 6% year on year to $161.5 billion. It made a non-GAAP profit of $0.60 per share, improving from its profit of $0.49 per share in the same quarter last year.

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Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Large-format Grocery & General Merchandise Retailer

Big-box retailers operate large stores that sell groceries and general merchandise at highly competitive prices. Because of their scale and resulting purchasing power, these big-box retailers–with annual sales in the tens to hundreds of billions of dollars–are able to get attractive volume discounts and sell at often the lowest prices. While e-commerce is a threat, these retailers have been able to weather the storm by either providing a unique in-store shopping experience or by reinvesting their hefty profits into omnichannel investments.

Sales Growth

Walmart is a behemoth in the consumer retail sector and benefits from economies of scale, an important advantage giving the business an edge in distribution and more negotiating power with suppliers.

As you can see below, the company's annualized revenue growth rate of 5% over the last five years was weak as its store count dropped, signaling that growth was driven by more sales at existing, established stores.

This quarter, Walmart reported solid year-on-year revenue growth of 6%, and its $161.5 billion in revenue outperformed Wall Street's estimates by 2.1%. Looking ahead, Wall Street expects sales to grow 2.4% over the next 12 months, a deceleration from this quarter.

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Same-Store Sales

Walmart's demand within its existing stores has generally risen over the last two years but lagged behind the broader consumer retail sector. On average, the company's same-store sales have grown by 6.3% year on year. Given its declining store count over the same period, this performance stems from higher e-commerce sales or increased foot traffic at existing stores, which is sometimes a side effect of reducing the total number of stores.

In the latest quarter, Walmart's same-store sales rose 3.8% year on year. This growth was a deceleration from the 7.3% year-on-year increase it posted 12 months ago, showing the business is still performing well but lost a bit of steam.

Key Takeaways from Walmart's Q1 Results

We liked that Walmart's revenue outperformed Wall Street's estimates on slightly higher-than-expected same-store sales growth. Gross margin also came in better, leading to an EPS beat. The company effectively raised its full year guidance, saying that it now expects to come in at the high end of the previously-provided sales and EPS guidance ranges. Overall, we think this was a really good quarter that should please shareholders. The stock is up 5.4% after reporting and currently trades at $63.07 per share.

Walmart may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.