Walmart posts sales gain in Q2 results
Walmart posted its 20th consecutive quarter of U.S. sales gains in its second quarter, along with a top and bottom line that topped analysts’ expectations.
Net income rose to $3.61 billion, or $1.26 per share, in the period ended July 26, compared with a net loss of $861 million, or 29 cents a share, in the year-ago period. Excluding one-time items, Walmart earned $1.27 a share. Analysts had expected $1.22 a share.
Total revenues rose 1.8% to $130.38 billion, topping expectations for sales of $130.11 billion. Sales in the U.S. rose 2.9% to $85.20 billion.
Same-store U.S. sales rose 2.8%, ahead of expectations. On a two-year stacked basis, U.S. comp sales were up 7.3%, the strongest growth in more than 10 years. Transactions edged up 0.6% during the quarter, compared with a 2.7% increase a year ago. The average ticket rose 2.2%, compared to a 1.8% increase a year ago.
E-commerce sales rose 37%, in line with last year, which the company partially credited to strong online growth in grocery. Walmart has been steadily expanding its next-day delivery and it now covers about 75% of the U.S. population. More than 2,700 Walmart stores now offer pickup for online grocery orders, and more than 1,100 locations offer same-day delivery for groceries.
“Customers are responding to the improvements we’re making, the productivity loop is working, and we’re gaining market share,” Walmart CEO Doug McMillon said in a statement.
McMillon also addressed the shootings that took place in Walmart stores in El Paso and Southaven, noting that the chain is focused on the safety of “our associates and customers in all our stores and clubs.
“Those tragic and painful events will be with us forever, and our hearts go out to the families that were impacted,” he said.
Walmart raised its forecast for fiscal 2020. It now estimates that U.S. same-store sales growth will be at the high end of its previously guided range between 2.5%-3%. Adjusted EPS is now expected to either increase or decrease slightly this year. Walmart was previously anticipating a low single-digit decline.
Addressing tariff concerns, CFO Brett Biggs stated that the company is hopeful that an “overarching” long-term agreement can be reached.
“Our merchants continue to execute appropriate mitigation strategies as our goal is to be the low-price leader,” Briggs said. “Over the past several months, the team has been able to thoughtfully manage pricing and margins with both our customers and shareholders in mind. We are currently reviewing the proposed List 4 tariff information that was published by the USTR on Tuesday. “
Briggs added that Walmart’s updated guidance reflects its current understanding of the timing of tariff implementation on various categories as List 4 affects a larger part of our assortment than the prior tariffs.
Net income rose to $3.61 billion, or $1.26 per share, in the period ended July 26, compared with a net loss of $861 million, or 29 cents a share, in the year-ago period. Excluding one-time items, Walmart earned $1.27 a share. Analysts had expected $1.22 a share.
Total revenues rose 1.8% to $130.38 billion, topping expectations for sales of $130.11 billion. Sales in the U.S. rose 2.9% to $85.20 billion.
Same-store U.S. sales rose 2.8%, ahead of expectations. On a two-year stacked basis, U.S. comp sales were up 7.3%, the strongest growth in more than 10 years. Transactions edged up 0.6% during the quarter, compared with a 2.7% increase a year ago. The average ticket rose 2.2%, compared to a 1.8% increase a year ago.
E-commerce sales rose 37%, in line with last year, which the company partially credited to strong online growth in grocery. Walmart has been steadily expanding its next-day delivery and it now covers about 75% of the U.S. population. More than 2,700 Walmart stores now offer pickup for online grocery orders, and more than 1,100 locations offer same-day delivery for groceries.
“Customers are responding to the improvements we’re making, the productivity loop is working, and we’re gaining market share,” Walmart CEO Doug McMillon said in a statement.
McMillon also addressed the shootings that took place in Walmart stores in El Paso and Southaven, noting that the chain is focused on the safety of “our associates and customers in all our stores and clubs.
“Those tragic and painful events will be with us forever, and our hearts go out to the families that were impacted,” he said.
Walmart raised its forecast for fiscal 2020. It now estimates that U.S. same-store sales growth will be at the high end of its previously guided range between 2.5%-3%. Adjusted EPS is now expected to either increase or decrease slightly this year. Walmart was previously anticipating a low single-digit decline.
Addressing tariff concerns, CFO Brett Biggs stated that the company is hopeful that an “overarching” long-term agreement can be reached.
“Our merchants continue to execute appropriate mitigation strategies as our goal is to be the low-price leader,” Briggs said. “Over the past several months, the team has been able to thoughtfully manage pricing and margins with both our customers and shareholders in mind. We are currently reviewing the proposed List 4 tariff information that was published by the USTR on Tuesday. “
Briggs added that Walmart’s updated guidance reflects its current understanding of the timing of tariff implementation on various categories as List 4 affects a larger part of our assortment than the prior tariffs.