Walmart on Tuesday reported second-quarter earnings that exceeded Wall Street’s expectations as the grocery retail giant gained ground and had a strong start to the back-to-school season.
The shares remained roughly unchanged in pre-market trading.
The discounter also tightened its forecast for the year and now expects earnings per share of $ 6.20 to $ 6.35. It said it expects Walmart US sales in the same store to grow 5 to 6%, excluding fuel.
CFO Brett Biggs said in an interview with CNBC that when customers “came out of hibernation” flocked to stores to purchase items like luggage, party supplies and clothing. Also, he said, families have bought backpacks and classroom items.
Biggs said the company is closely monitoring the Delta variant with the rise in Covid cases, but has not seen any change in customer shopping behavior.
“Wearing masks is back in fashion, but runs with supplies – things we saw last March, April” [of 2020] – We really haven’t seen each other anymore, “he said.
CEO Doug McMillon said in a press release that the company had gained more market share in the food sector, one of its core businesses. He said it made strides in new areas too, adding thousands of online sellers to its third-party marketplace and nearly doubling ad sales in Walmart US in the quarter year over year.
According to Refinitiv’s consensus estimates, for the second fiscal quarter ended July 31, the company reported the following:
- Earnings per share: adjusted $ 1.78 versus an expected $ 1.57
- Revenue: $ 141.05 billion versus an expected $ 137.17 billion
Walmart lapsed a year-ago quarter when stimulus checks increased sales despite limited store opening hours and customer concerns about Covid-19. Last year, Walmart faced new competition as some customers bought groceries in smaller or more convenient supermarkets during the pandemic. Walmart also saw a shift towards e-commerce as other shoppers tried not to enter stores.
Over the past two quarters, the discounter has said it is regaining market share in the grocery sector as consumers return to old habits. Customers also make more shopping trips. Walmart US transactions were up 6.1%, but the average ticket was down nearly 1%.
However, in-store and online sales growth has slowed compared to a hectic time of buying groceries and household items during the earlier stage of the health crisis. Walmart’s same-store sales in the US rose 5.2%, higher than analysts’ forecast 3.3% increase, according to a StreetAccount poll, but lower than 9.3% in the same quarter last year. Over the past two years, the retailer said its sales in the same store rose 14.5%.
The sales growth in e-commerce in the USA has declined significantly and also increased by 6% in the second quarter compared to 97% in the same period of the previous year. They were up 37% in the first quarter and 69% in the fourth quarter. However, over the past two years, the retailer said that e-commerce sales have doubled.
Walmart reported net income from $ 6.48 billion, or $ 2.27 per share last year to $ 4.28 billion, or $ 1.52 per share. With no items, the company made $ 1.78 per share. According to Refinitiv, analysts expected Walmart to make $ 1.57 per share.
Walmart reported its highest quarterly revenue ever for a three-month period outside the holiday season. Total revenue increased 2.4% to $ 141.05 billion from $ 137.74 billion a year ago, surpassing it Wall Street expects $ 137.17 billion.
Walmart subsidiary Sam’s Club sales in the same store rose 7.7% excluding fuel – more than the 3.7% growth forecast by analysts.
The company expects Sam’s Club sales to grow 7.5% to 8.5% this year, excluding fuel and tobacco.
Walmart stocks have chased other retail pandemic beneficiaries. As of Monday’s close of trading, Walmart shares were up about 5% that year compared to Target and Kroger, which saw shares rise 49% and 49% respectively in 2021.
Read the company’s press release here.
– CNBC’s Courtney Reagan and Robert Hum contributed to this report.