Jim Cramer on Walmart Q1 results: ‘execution was embarrassing’

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on May 17, 2022
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  • Walmart Inc reports lower-than-expected profit for its fiscal first quarter.
  • Jim Cramer expressed disappointment in Walmart on CNBC's "Squawk Box".
  • Shares of the U.S. big box retailer slid nearly 9.0% on Tuesday morning.

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Walmart Inc (NYSE: WMT) shares are down nearly 9.0% on Tuesday after the retail giant reported lower-than-expected profit for its fiscal first quarter.

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Walmart Q1 earnings snapshot

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  • Net income came in at $2.054 billion that translates to 74 cents a share.
  • In Q1 last year, net income stood at a higher $2.730 billion or 97 cents a share.
  • On an adjusted basis, Walmart earned $1.30 in the recent financial quarter.
  • Revenue jumped 3.0% to $141.569 billion, as per the earnings press release.
  • FactSet consensus was for $1.48 of adjusted EPS on $138.803 billion in revenue.
  • U.S. same-store sales were up 3.0% versus a 2.5% increase expected.

eCommerce and global advertising business saw a 1.0% and 30% growth, respectively, in the fiscal first quarter. The stock is down more than 15% from its year-to-date high in April.

Future guidance and Jim Cramer’s remarks

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For fiscal 2023, Walmart forecasts a 4.0% sales growth, a 3.5% increase in U.S. comparable sales (excluding fuel), and 1.0% decline in per-share earnings. The guidance doesn’t account for divestitures.

While sales estimates were better-than-expected, analysts had called for a 4.4% increase in the retailer’s EPS this year. Expressing his disappointment in Walmart on CNBC’s “Squawk Box”, Jim Cramer said:

This was a terrible quarter. Inventories bad. Sales bad. Execution terrible. It’s really a suboptimal situation. The execution is so poor it’s embarrassing. This should be a big soul-searching moment for Walmart.

He said other retailers like Costco were better navigating the inflationary pressures than Walmart.

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