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Walmart’s e-commerce sales in the U.S. shot up by 97%. The retailer’s U.S. same-store sales grew by 9.3% in the second quarter, fueled by purchases of food and general merchandise.
American multinational retail corporation Walmart Inc (NYSE: WMT) reported on its earnings for its financial Q2 of 2021. According to the official statement, the company’s net sales and operating results were significantly impacted by a prolongation of the global pandemic situation. Bigger demand for products across numerous categories led to strong top-line and gross margin results.
Doug McMillon, President and CEO, stated:
“I want to give a big thank you to our associates for their tireless efforts during these unprecedented times. We also appreciate the trust and confidence of our customers. We remain focused on serving them well now and expanding our set of global capabilities to serve them well in the future.”
The company’s total revenue stood at $137.7 billion, which represents a rise of $7.4 billion, or 5.6%. Excluding currency, total revenue would have increased by 7.5% to reach $140.2 billion.
In Q2 Walmart U.S. comp sales rose by 9.3%, led by strength in general merchandise and food. Walmart U.S. eCommerce sales went up by 97% with strong results across all channels. Sam’s Club comp sales jumped 13.3% while eCommerce sales grew 39%.
Walmart Membership Numbers in Q2
Reduced tobacco sales negatively affected comp sales by approximately 390 basis points. The rise regarding the membership income was the highest quarterly incline in more than five years. New member count jumped over 60%. Walmart International net sales stood at $27.2 billion, which represents a plunge of 6.8%. Changes in currency rates negatively affected net sales by around $2.4 billion.
Excluding currency, net sales would have been $29.6 billion, a rise of 1.6%. Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America.
Consolidated gross profit rate rose by 63 basis points mostly as a result of a shift in the mix of sales to higher-margin general merchandise categories, fewer markdowns and better margins on fuel, partially offset by the carryover of investments in price from last year.
Spending connected with stimulus payments in the U.S. positively had a positive effect on sales of general merchandise. Consolidated operating expenses as a percentage of net sales grew by 42 basis points, mostly as a result of incremental expenses related to COVID-19, a business restructuring in the U.S. and a discrete tax item.
Getting Another Bounce
In total, all of these costs negatively affected expense leverage by about 130 basis points. Underlying productivity in stores and eCommerce stood strong. Consolidated operating income was $6.1 billion, representing a rise of 8.5%.
Adjusted operating income in constant currency 2 grew by 18.6% led by strength across all operating segments, including significantly lower losses in Walmart U.S. eCommerce. Adjusted EPS excludes the effects, net of tax, of an unrealized gain of $0.89 on equity investments, a business restructuring charge in the U.S. of $0.10 and $0.08 for a discrete tax item.
Walmart Chief Financial Officer Brett Biggs explained that the retailer could get another bounce, if there’s further stimulus.
“Stimulus was definitely impactful to the consumer in the second quarter, and we’re watching what’s going on in Washington, and how we’re going to progress with a new stimulus package. I think certainly it would be helpful for consumers.”
Biggs also added that families could decide to pull back or spend differently during back-to-school season as students prepare to learn remotely or go to school just a few days each week.
He said compared with previous years that “has made back-to-school a little more uncertain” and “a little more choppy.”
At the time of writing, Walmart (WMT) stock went down by 1.03% to $134.20 in the pre-market trading.