Walmart Delivers Strong Comp Sales Growth In Q2

The Walmart U.S. business delivered the best quarterly comp sales results for the retailer in more than a decade during the second quarter. Walmart also highlighted new features in its home category online shopping platform as well as the expansion of its brand assortments.

Revenues in the quarter were $128.03 billion with sales coming in at $127.06 billion versus revenues of $123.36 billion with sales coming in at $121.95 billion in the period a year before. Operating income was $5.75 billion versus $5.97 billion in the quarter a year previous.

For Walmart U.S., net sales were $82.82 billion versus $78.74 billion and operating income was $4.48 billion versus $4.42 billion in the year-earlier quarter. Comparable sales, excluding fuel, were up 4.5% with traffic gaining 2.2% and average ticket gaining 2.3%. E-commerce represented about 100 basis points of the comp gain.

At Sam’s Club, net sales were $14.79 billion versus $14.88 billion and operating income was $402 million versus $391 million in the year-prior quarter. Comp sales were up 5% with traffic gaining 6.7% and ticket declining $1.7%. E-commerce represented about 110 basis points of the comp gain.

For the second quarter ended July 31, Walmart posted a net loss of $861 million, or 29 cents per diluted share, versus net income of $2.9 billion, or 96 cents per diluted share, in the period a fiscal year earlier. But the company was in the black on an adjusted basis, with one-time charges excluded, as earnings per share hit $1.29 versus $1.08 in the quarter a year prior.

Walmart beat a Zacks Investment Research consensus analyst estimate of $1.21 per adjusted share in the quarter.

In a conference call, Walmart CEO Doug McMillon emphasized the effect of key results, saying, “The Walmart U.S. business delivered the best quarterly comp sales results in more than a decade, up 4.5%, excluding fuel. Walmart U.S. e-commerce sales accelerated to 40% growth. Sam’s Club comp sales were up 6.5%, excluding fuel and a 150 basis point negative impact from tobacco.”

Noteworthy highlights for Walmart U.S. included, McMillon said, “On Walmart.com, we launched new features to the Home category shopping experience this past quarter, including a three-dimensional virtual tour and the ability for customers to quickly ‘buy the room’ based on their preferences.”

In addition, he said, “We’ve added 1,100 new brands to Walmart.com year-to-date, including Zwilling J.A. Henckels cutlery and cookware, Therm-a-Rest outdoor products, O’Neill surf and water apparel, Shimano cycling products, and the brands available on the dedicated Lord & Taylor shop, like Steve Madden footwear. This is a key area of focus for the team because we know that customers value an expanded assortment of these popular brands. We have more work to do on our e-commerce assortment to get to the margin levels we desire, and we’re in discussions to bring more key brands to our site.”