Walmart runs strong in Q2, fueled by surging grocery, online sales

Walmart blew past Street expectations and raised its full-year outlook for the second consecutive quarter as it continued to win over shoppers —both in-store and online. 

“We had another strong quarter,” CEO Doug McMillon said in a statement. “Food is a strength, but we’re also encouraged by our results in general merchandise versus our expectations when we started the quarter. We’re in good shape with inventory, and we like our position for the back half of the year.”

Walmart released its results the morning after it announced several senior leadership changes, including the retirement of Judith McKenna as president and CEO of Walmart International. She will be succeeded by Kath McLay, CEO of Sam's Club.

The company's strong quarter stood in contrast to rival Target, which on Tuesday reported a 5.4% drop in sales. Walmart said it is seeing strength across segments as shoppers continue to respond to economic pressures.

“We see people across income cohorts come to us more frequently, looking to save money on everyday needs,” McMillon said on the company's earnings call. "That gives us an opportunity to drive conversion in more discretionary categories."

For the second quarter (ended July 28), Walmart reported net income of $7.891 billion, or $2.92 a share, up from $5.149 billion, or $1.88 a share, in the year-ago period. Adjusted  earnings came to $1.84 per share, easily beating the $1.71 analysts had expected.

Walmart’s consolidated revenue rose nearly 5.7% to $161.6 billion, up from $152.8 billion a year ago and topping analysts’ estimates of $160.2 billion.  International sales rose 13% to $17.6 billion. 

U.S. e-commerce sales rose 24%, led by pickup and delivery. Walmart’s global advertising business,  grew approximately 35%.

Same-store sales at Walmart U.S.  rose 6.4%, more than expected, led by strength in  grocery and health & wellness, while general merchandise sales declined modestly. The company noted that it gained market share in grocery with strong unit growth. 

U.S.transactions increased by 2.9%. The average ticket rose by 3.4%.

Sam’s Club U.S. sales fell 0.3% to $21.8 billion. Sam’s same-store sales, excluding fuel were up 5.5%, led by food and consumables, as well as health.

For fiscal 2024, Walmart expects adjusted earnings per share of $6.36 to $6.46 and sales growth of 4% to 4.5%.  That’s up from the company’s previous guidance for consolidated net sales gains of 3.5% and an adjusted earnings per share range of between $6.10 and $6.20.