Walmart (WMT), the world’s largest retailer, reported better-than-expected second-quarter earnings, supported by online sales that rose 97% during the period as the coronavirus crisis prompted consumers to flock to e-commerce for their needs.
Here were the key numbers compared to Bloomberg’s consensus forecasts:
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Income: $ 137.7 billion vs. expectations of $ 135.6 billion
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Custom EPS: $ 1.56 vs. expectations of $ 1.24
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Walmart US in-store sales products (excluding gas): 9.3% versus 5.3% expectations
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Walmart US e-commerce sales: up 97%
Walmart’s share, which closed at $ 135.60 on Monday, jumped more than 6% in the stock market before gains pared.
“I want to thank our colleagues very much for their restless efforts in these unusual times,” CEO Doug McMillon said in a statement.
“We also value the trust and confidence of our customers. We remain focused on serving them now and expanding our set of global capabilities to serve them well in the future, ”he added.
In the quarter, Walmart’s revenue rose 5.6%, or $ 7.4 billion, from the same quarter a year ago – benefiting from its status as an essential company that remained open in the darkest days of COVID-19 -lockdown.
The closely followed similar retail sales of the company in the U.S. jumped 9.3% in the quarter, “led by strength in general merchandise and food.” Online pick-up and delivery of supermarkets “continued to experience high sales,” the company said.
Comparable sales for food increased high single-digit numbers as retailers continued to supply consumables, household cleaning products, and stationery.
At the end of the quarter, Walmart offered its online pickup service for groceries at 3,450 locations and same-day delivery at 2,730 stores.
The strong quarter of the retail giant was led by buying boom in categories such as groceries, health / wellness, and general merchandise.
The strong quarter of the retail giant was led by buying boom in categories such as groceries, health / wellness, and general merchandise.
However, there were some pockets of weakness. Walmart pointed out that similar transactions decreased 14% – affected by what data analytics firm Placer.ai noted recently was softer store traffic.
After a steep drop in April, Placer.ai data found that Walmart’s in-store traffic ended in May, but fell sharply in June and July. The company also noted stiff ‘crossover competition’ from retail giants such as Dollar General (DG) Lowe’s (LOW) and Home Depot (HD) – which also reported strong Q2 earnings on Tuesday.
“While Walmart is still king, the pandemic has led to more home improvement shopping and growing visits to dollar stores, two segments that seem to be catching on,” notes Ethan Chernofsky, Placer.ai’s VP of marketing.
However, this influence was more than offset by Walmart’s muscular web sales. Similar average clicks grew 27% as “customers continue to stop shopping sprees with larger baskets and move more purchases to online.”
Walmart also notes that retail outlets, particularly in the general merchandise category, were supported by government stimulus spending, especially at the beginning of the quarter. Congress and the White House are currently considering a new incentive package expected to top $ 1 trillion, and are likely to extend additional unemployment benefits.
“When stimulus funds were tapered, sales began to normalize, but July comps grew even more than four percent,” the company wrote.
The general market share category saw growth in sales in the mid-teens. Some of the areas where shoppers spent incentive funds include indoor, electronics, outdoor / lawn and garden, and sporting goods.
Apparel was also “particularly strong” in the quarter over women, men and children with comps growing mid-single-digit percentage.
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Julia La Roche is a correspondent for Yahoo Finance. Follow them up Twitter.
