“Given our confidence in selling through the inventory, I feel confident about operating cash flow getting back on track as we go through the year.”

In context

“markdowns pressured Walmart U.S. gross profit by about $100 million. We expect the inventory position to improve as we go through Q2. SG&A expenses deleveraged 39 basis points, primarily due to increased U.S. wage costs, partially offset by lower total COVID costs versus last year. We expected higher labor cost at Walmart U.S. due to the hourly associate wage increase announced last year. As mentioned, Q1 profit declined more than expected with operating income down 20% and adjusted EPS down 20% to $1.30. Operating cash flow was also lower than expected at negative $3.8 billion. This is due to several factors, including higher inventory amounts with about half of the increase due to inflation, lower operating income, and the timing of certain payments and payables due to inventory delays. Given our confidence in selling through the inventory, I feel confident about operating cash flow getting back on track as we go through the year. Now let's discuss segment results. Walmart U.S. comp sales excluding fuel grew 3% and we're up 9% on two-year stack, reflecting strong food sales which were up low-double digits. As mentioned previously, general merchandise sales were softer but still increased high-single digits on a two-year stack. Transactions were flat versus last year, while average ticket increased 3%. E-commerce sales grew 1% against strong gains last year as customers continue returning to stores. We're making strong progress in many of our newer higher margin initiatives, the Walmart Connect advertising business continues to scale as we expand self-serve capabilities and offerings. Our new data monetization business, Walmart Luminate, continues to accelerate with over 75% growth quarter over quarter as more suppl”