Categories AlphaGraphs, Earnings, Retail

Walmart’s Q2 results beat market estimates

Walmart Inc. (NYSE: WMT) reported better-than-expected revenue and earnings for the second quarter of 2020, sending shares rising 7% in premarket hours on Thursday.   

Total revenue inched up 1.8% year-over-year to $130.4 billion, beating estimates of $130.2 billion. On a constant currency basis, revenues rose 2.9% to $131.7 billion.

Walmart beat revenue and earnings estimates for Q2 2020

Net income attributable to Walmart was $3.6 billion, or $1.26 per share, compared to a net loss of $861 million, or $0.29 per share, in the prior-year period. Adjusted EPS amounted to $1.27, beating forecasts of $1.22.

Walmart US comp sales grew 2.8%. On a two-year stacked basis, comp sales grew 7.3%, marking the strongest growth in over 10 years. Walmart US ecommerce sales grew 37% helped by strong growth in online grocery.

Walmart US surpassed 1,100 grocery delivery locations and has more than 2,700 pickup locations. The NextDay delivery service from now covers around 75% of the US population.  

Sam’s Club saw comp sales growth of 1.2% and ecommerce sales growth of 35%. The segment saw decreases in average transactions and ticket. Lower tobacco sales negatively affected comp sales by 300 basis points.

Net sales at Walmart International fell 1.1% on a reported basis but grew 3.3% on a constant currency basis. Strength in Walmex and China were offset by softness in the UK and Canada.  

Also see: Walmart Q2 2020 Earnings Preview

During the quarter, Walmart opened two new ecommerce fulfillment centers in Mexico and announced plans to invest $1.2 billion to upgrade the logistics network in China.

For fiscal year 2020, Walmart expects consolidated net sales growth of around 3% in constant currency. Adjusted EPS is expected to range between a slight decrease and a slight increase compared with fiscal year 2019, including Flipkart. Excluding Flipkart, adjusted EPS is expected to increase by a mid to high single digit percentage range.

Walmart US comp sales growth, ex-fuel, is expected to be towards the upper-end of 2.5% to 3%. Comp sales at Sam’s Club are expected to grow around 1%, excluding fuel. Walmart US ecommerce net sales growth is expected to be around 35%. Walmart International sales is expected to grow 3-4% in constant currency.

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