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August 17, 2021
Walmart Maintains Momentum as COVID’s Retail Impact Wanes
Posted In: Retail Articles
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By Mike Duff

Contributing Editor

Despite comparisons with the COVID-19 affected period a year past, Walmart posted strong financial results in the second quarter, beating Wall Street estimates on earnings and revenues.

Second-quarter company net income was $4.28 billion, or $1.52 per diluted share, versus $6.48 billion, or $2.27 per diluted share, in the year-previous period.

Adjusted earnings per share were $1.78 versus $1.56 in the year-before quarter, Walmart reported.

Walmart beat a Yahoo Finance-published analyst average adjusted diluted earnings per share estimate of $1.56. The retailer beat a revenue estimate of $136.88 as well.

Net sales were $139.87 billion and net revenues, including membership fees and other income, were $141.05 billion versus $136.82 billion and $137.74 billion, respectively, in the year-earlier quarter. Operating income was $7.35 billion versus $6.06 billion in the period a year prior, while adjusted operating income on a constant currency basis was $7.2 billion versus $6.52 billion.

Walmart U.S. posted a comparable sales gain of 5.2% excluding the impact of fuel price volatility, with transactions up 6.1% and average ticket down 0.8% in the quarter year over year. The contribution of e-commerce to comps was about 20 basis points. Net sales were up 5.3% to $98.2 billion while operating income was up to $6.1 billion from $5.1 billion and adjusted operating income was up to $6.1 billion from $5.4 billion in the period year over year.

Sam’s Club posted a comparable sales gain of 7.7% excluding the impact of fuel price volatility, with transactions up 5.1% and average ticket up 2.5%. The contribution of e-commerce to comps was about 180 basis points. Net sales were up 13.9% to $18.6 billion while operating income was up to $660 million from $592 million in the period year over year.

On a two-year stacked basis, Walmart relayed during the conference call, e-commerce sales effectively doubled. As for the Sam’s Club side, Walmart experienced membership income growth up 12.2%, the fourth consecutive quarter of double-digit gains.

In a conference call, Walmart president and CEO Doug McMillon said that, during the second quarter, customer behaviors shifted to shopping in Walmart stores as compared to online, which helped the retailer gain market share in grocery. The e-commerce sales slowdown has to be considered alongside the tremendous growth last year during the pandemic, he said. On a two-year stacked basis, Walmart relayed during the conference call, e-commerce sales effectively doubled. As for the Sam’s Club side, Walmart experienced membership income growth up 12.2%, the fourth consecutive quarter of double-digit gains.

In announcing the financial results, McMillon said, “We had another strong quarter in every part of our business. 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 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.”

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