BENTONVILLE, Ark. – Walmart U.S. generated incremental improvement in its general merchandise comps, although they remained negative during the second quarter.
“Household budgets are still under pressure,” Walmart Inc. president and CEO Doug McMillon told investors during this morning’s quarterly call. “We see families that are discerning about what they’re spending on.”
Walmart U.S. is employing rollbacks to help boost sales. The Back-to-School season is off to a solid start, and the company expects a healthy performance around key holidays in the second half, executives said.
The overall business was strong during Q2, with gains across all retail divisions. Key take-aways from Q2 results:
Walmart U.S.
- General merchandise sales declined in the low single-digit range due to softness in the discretionary categories of apparel, home and sporting goods. The bright spots were automotive and back-to-school goods.
- Total comp sales climbed 6.4%, driven by strength in grocery and health & wellness.
- Total net sales were better than expected, rising 5.4% to $110.9 billon, driven by increases in both store and digital transactions.
- E-commerce sales jumped 24.0%, led by double-digit growth in store-fulfilled pickup and delivery and 36% increase in advertising.
Sam’s Club
- Comp in the Home and Apparel sector declined in the low single-digit range. Softness in furniture and toys was partially offset by strength in tires.
- Total comp, excluding fuel, rose 9.5% owing to solid increases in ticket, transactions and units sold.
- Net sales, excluding fuel, were up 5.3% to $21.8 billion. Including fuel, net sales slipped 0.3% to $21.8 billion.
- E-commerce sales climbed 18.0%, led by curbside pickup.
For the second quarter ended July 31, total company revenues came in at $161.6 billion. Net income jumped 53% to $7.89 billion, or $2.92 per share.
With those results in hand, Walmart Inc. raised its full-year guidance. The company now expects consolidated net sales for the fiscal year to rise between 4% to 4.5%. Previously, it put the increase around 3.5%.
It also reset adjusted earnings per share for the year to range between $6.36 and $6.46. Prior guidance ranged between $6.10 and $6.20.