Walmart sales beat expectations as online volume rises 67%
Walmart’s (WMT) second-quarter results beat expectations, but third-quarter guidance was a bit tepid.
During the period, the retail behemoth earned $1.08 per share, which was a hair higher than the $1.07 expected by analysts. This was on $123.36 billion in net sales; analysts were expecting $123.15 billion in sales.
Importantly, US comparable store sales climbed 1.8%, which was a bit better than the 1.7% growth expected.
Management’s guidance was more lackluster. For Q3, the company expects to earn somewhere between $0.90 to $0.98 per share, which compares to analysts’ expectations for about $0.98. Full year, management expects to deliver $4.30 to $4.40 in earnings per share, which compares expecations for $4.39.
Shares are down 2% following the news.
Online
Walmart’s efforts in the online retail space continues to generate results. Gross merchandise volume in the US online increased by 67%, a number that includes boosts from recent acquisitions like Moosejaw, Shoebuy, and men’s clothing retailer Bonobos.
“The majority of this growth was organic through Walmart.com as customers are finding a broader assortment and more options to receive what they want at their convenience,” CEO Doug McMillon said. “They love not having to pay a membership fee to get Walmart’s free two-day shipping on millions of items.”
McMillon also noted that the company surpassed 67 million SKUs on Walmart.com. This number is 30% higher than what it was in Q1.
Grocery
“The grocery business continued to improve as food categories delivered the strongest quarterly comp sales performance in five years,” Walmart EVP Brett Biggs said.
Expectations are high for Walmart to innovate its grocery strategy, especially considering Amazon’s recent announcement to buy Whole Foods.
“We’ve seen strong results from the rollout of online grocery, which is now in more than 900 U.S. locations, and we’re expanding this service in many of our markets around the world,” McMillon said.
On Wednesday, competitor Target (TGT) reported that its comparable-store sales grew 1.3% during Q2. During the period, the retailer also saw a 32% jump in comparable online sales.
Walmart shares have been strong in 2017, climbing 18% since the beginning of the year. This compares to the S&P 500 (^GSPC), which is up 10%.
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Sam Ro is managing editor at Yahoo Finance.
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