Walmart’s Q1 2022 earnings revealed top-line results in line with their guidance and market expectations with a major miss on their bottom-line due to factors related to inflation, excess labor, and fuel costs. Leaders emphasized their confidence in the company’s long-term growth algorithm, so much so that they raised their forward-looking guidance for the remainder of the year. On the call, company leaders addressed inflation & price pressures, market share gains in Grocery, and the strength of their flywheel.
Our team at Harvest Group pulled together 5 takeaways for Walmart Suppliers after the Q1 earnings call. You can read them here and download the full earnings report below.
- In the midst of inflation & pricing pressures, Walmart will continue to focus on delivering everyday low price to shoppers. They are facing the challenge of keeping prices low for customers while managing the rising cost of goods. They are starting to see more trade-downs to private label and some curtailing of discretionary spending.
- As Walmart continues to experience margin pressure, they may ask for additional investment from suppliers. Walmart may focus more on higher margin businesses like their 3P marketplace, advertising, and data monetization. However, in April, Amazon began levying a 5% fuel and inflation surcharge to their US Fulfilled By Amazon (FBA) sellers. It’s possible other retailers will begin consider similar means of recouping extra costs related to inflationary pressures.
- Walmart leaders indicated that Luminate has grown 75% since Q4. However, Walmart is still in the early phases of rolling out Luminate’s capabilities, and they are still targeting their largest tier suppliers for partnerships. Small and medium suppliers should expect a bit more of a wait before Luminate becomes available for them.
- Sam’s Club has been growing persistently since the beginning of the pandemic, outpacing Walmart U.S.’s growth, and it is expected to continue to see momentum over the coming quarters. The Club Channel has been one of the biggest winners throughout the pandemic and during this inflationary period.
- Walmart’s Annual Shareholder’s Meeting, including the Associate Expo, will be happening June 1-3, and will look more normal this year than the last two years. The Shareholder’s Meeting itself will be held virtually on Wednesday, June 1, and the Associate Expo will be held in person at the fairgrounds in Fayetteville, AR on June 1-2.
Download the full report here:
If you’re ready to explore how Harvest Group can help you navigate your Walmart business, reach out to us at firstname.lastname@example.org or fill out our Contact Us form here.