Walmart post strong Q2 results

Walmart announced second quarter results with strong growth in revenue and operating income. Globally, e-commerce penetration is higher across all segments. Walmart U.S. comp sales are up 4.2%. 

 “Our team delivered another strong quarter. They work hard every day to help our customers and members save time and money. Each part of our business is growing—store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model,” said Doug McMillon, president and CEO of Walmart.

Second Quarter Highlights:

• Consolidated revenue of $169.3 billion, up 4.8%, or 5% (cc)
• Consolidated gross margin rate up 43 bps, led by Walmart U.S. and Walmart International
• Consolidated operating income up $.6 billion, or 8.5%; adjusted operating income up 7.2% due to higher gross margins and growth in membership income; also benefited from reduced e-commerce losses
• Global e-commerce sales grew 21%, led by store fulfilled pickup & delivery and marketplace
• Global advertising business grew 26%, including 30% for Walmart Connect in the U.S.
• Adjusted EPS of 67 cents excludes the effect, net of tax, from a net loss of 11 cents on equity and other investments
• Bob Moritz, retired chair of PwC, to join Walmart board of directors

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Walmart U.S.:

• Sales reflected strength in transaction counts and unit volumes, across both stores and e-commerce channels
• Value-convenience proposition continues to resonate with customers and members; share gains across income cohorts primarily driven by upper-income households 
• Strong momentum in e-commerce with growth of 22%, led by store-fulfilled pickup and delivery 
• Walmart Connect advertising sales grew 30%; strong growth in advertiser counts, including marketplace sellers

 Walmart International:

• Balanced sales growth with stores and e-commerce evenly contributing and increased transaction counts & unit volumes 
• e-commerce sales up 18%, led by store fulfilled pickup and delivery and marketplace; penetration up across markets
•  Advertising business grew 23%, led by Flipkart and Walmex
•  Strength in food and consumables as well as improved growth in general merchandise 
• Gross profit rate increased 44 bps due to improved e-commerce margins and growth in higher-margin businesses 
• Operating income cc up 15.7% with strength across markets and benefiting from lower losses in e-commerce

Video: 5 Minutes with Walmart's Kevin Host

Sam’s Club U.S.: 

• Strong comp sales, led by food and health and wellness as well as increases in transactions and unit volumes 
• Gained dollar and unit market share in grocery and general merchandise categories, including apparel and electronics 
• Growth in e-commerce sales of 22%
•  Strong growth in membership income, up 14.4%, with record total membership and Plus penetration at quarter end 
• Gross profit rate increased 22 bps; operating expense deleveraged 26 bps

Walmart issued guidance for Q3 and raised its outlook for FY25. 

For Q3, net sales are expected to grow 3.25% to 4.25% and operating income to grow 3% to 4.5% in constant currency  

For FY25, net sales are expected to grow 3.75% to 4.75% and adjusted operating income to grow 6.5% to 8.0% cc.