Walmart Continues To Grow; Expects E-commerce Revenues to Reach $75 Billion

Walmart continues to make gains in a turbulent retail environment thanks to its growing e-commerce, grocery and domestic businesses.    

“We had another strong quarter in every part of our business,” Doug McMillion, president and chief executive officer of Walmart, 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 new ways to commercialize our data and build technology. We have 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.” 

Tuesday morning’s earnings results revealed total company revenues for the three-month period ending July 31 up 3.3 percent to $141 billion, compared with nearly $138 billion a year earlier. Sales in the U.S. division increased 5.3 percent to $98.2 billion, up from $93.3 billion a year earlier. Revenues at Sam’s Club rose nearly 14 percent during the quarter, year-over-year, to $18.6 billion, up from $16.4 billion a year earlier. E-commerce sales in the U.S. rose 6 percent during the quarter, year-over-year, or 103 percent compared with 2019’s second quarter. Comparable grocery sales in Walmart U.S. were up 6 percent, year-over-year, driven by growth in stores. 

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Headwinds included Walmart International, where revenues fell more than 15 percent to $23 billion, compared with $27.2 billion the same time last year. 

The company logged $4.2 billion in consolidated net income as a result, down from nearly $6.5 billion a year earlier, causing shares to fall by about 1 percent in Tuesday morning’s pre-market hours. 

Still, Walmart raised its full-year outlook. The company is now expecting net sales to increase 6 percent to 7 percent for the year, or by more than $30 billion, with earnings-per-share to be in the range of $6.20 and $6.35 apiece. The retailer is also anticipating sales in its international division will decline by about 21.5 percent and 22.5 percent in constant currency.

“Stores continued to validate Walmart’s ongoing investments as they were the key driver of the $1 billion increase in U.S. operating income on $5 billion in increased revenue, which is particularly impressive given the strength in its lower margin grocery-equivalent business that continues to grow share despite its massive scale,” said Charlie O’Shea, Moody’s vice president. “The meaningful upping of guidance for Q3 confirms our view that Walmart will continue to run on all cylinders, leaning heavily on its stores as it remains one of the premier global retailers by any yardstick.”

The retailer ended the quarter with $39.5 billion in long-term debt and $22.8 billion in cash and cash equivalents. 

Shares of Walmart, which closed up 0.82 percent to $150.75 a piece, are up more than 11 percent, year-over-year.

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