As Shoppers Return to Stores, Walmart Blows Past Q2 Estimates

Share gains in grocery behind increasing store traffic helped Walmart post U.S. comp sale gains of 5.2% in its fiscal second quarter, blowing past most analyst estimates and prompting the Bentonville, Ark.-based retailer to raise its full-year comp guidance.

Sales at its Walmart U.S. division increased by 5.3% to $92.8 billion in the period, which ended July 31. Total revenue of $141 billion was up by 2.4%, and adjusted net earnings per share of $1.78 crushed a consensus figure of $1.57, helped along by a 24% operating income gain and a 20-basis-point increase in U.S. gross margins.

Walmart was cycling pandemic-influenced U.S. comps of 9.3% achieved in last year’s second quarter, driven by larger baskets, fewer store trips and exploding e-commerce sales. This year’s figures showed that customers have been returning to stores—primarily for groceries—with U.S. comp transactions rising by 6.1%, while the average ring dipped only slightly, by 0.8%. In last year’s second quarter, traffic was down by 14%, but the average basket swelled by 27%.

E-commerce grew by 6% in the quarter, lapping 97% growth a year ago.

A two-year comp stack, meant to account for the unusual effects last year, showed Walmart having gained U.S. comps by 14.5%.

Sam's Club once again outperformed Walmart stores in comp sales growth and saw membership income rise 12.2% (vs. 12.7% in the first quarter). Sam's Club membership count also again reached an all-time high in the second quarter.

"We had another strong quarter in every part of our business," Walmart President and CEO Doug McMillon said in a statement. "Our global e-commerce sales are on track to reach $75 billion by the end of the year, further strengthening our position as a leader in omnichannel. We grew market share in U.S. grocery, added thousands of new sellers to our marketplace, rapidly grew advertising businesses around the world, and we’re finding innovative ways to commercialize our data and build technology." Walmart, he said, has "a unique ecosystem of products and services designed to serve customers in broader, deeper ways, and we’re grateful to our associates for making it all happen."