- Walmart CEO Doug McMillon said the retailer is bracing for volatility in the U.S.
- "We may see a bit of a two-step in some places where we make progress; two steps forward, take a step back, and then move forward again," he said.
- He said because of China's approach, "the bounce back is going to be different and has been fairly strong there relative to what we'll see in the U.S. and other markets."
- The big-box retailer reported a strong first quarter but still withdrew its financial outlook because of economic uncertainty.
As states lift stay-at-home orders, Walmart customers have started to shop for more clothes and discretionary items. The retailer is getting a bounce from stimulus checks and preparing to reopen shuttered parts of some stores, such as optical and auto care centers.
But CEO Doug McMillon told analysts Tuesday that the retailer is prepared for a bumpy road ahead in the U.S. during the coronavirus pandemic, compared with the steadier recovery it's seen in China.
"We may see a bit of a two-step in some places where we make progress; two steps forward, take a step back, and then move forward again," he said. "Obviously, there are a lot of pieces that have to be put in place, from testing to exposure notification. I think policies at state level and county level are going to influence this. It will be volatile, and we'll just manage it."
He said because of China's approach "the bounce back is going to be different and has been fairly strong there relative to what we'll see in the U.S. and other markets."
Walmart reported a strong first quarter on Tuesday, with e-commerce sales growing by 74% and same-store sales up by about 10%. Though it beat Wall Street's estimates, the company withdrew its financial outlook.
On a Tuesday call with analysts, Walmart Chief Financial Officer Brett Biggs said the economy and the company's sales are just too difficult to predict. He said there are numerous factors that could move the needle, including employment trends, consumer confidence and whether there's more economic stimulus.
McMillon echoed that uncertainty when asked by an analyst about the back-to-school season, a time when families usually buy a wide variety of items, from notebooks and lunchboxes to new clothes and laptops.
"I would not attempt to forecast back-to-school right now," he said. "There's a reason we pulled guidance. We're telling you about the first quarter. We'll tell you about the second quarter later."
He said the company is focused on one thing it can control: Managing inventory. He said it's trying to restock the popular items that quickly disappear from stores and fulfillment centers. Those include bicycles, laptops, cleaning supplies — and even fishing poles.