Walmart said over 4000 of its stores back open until 10 p.m.
Walmart’s sales boomed in the second quarter, as consumers spent stimulus checks, ate at home, and invested in their homes and yards.
Its U.S. e-commerce sales soared 97% in its Q2, which ended July 31.
“We are pleased with the progress we are making on walmart.com,” president and CEO Doug McMillon said on the retailer’s earnings call. “We had really strong sales growth and significantly reduced losses. The tailwinds we are experiencing are accelerating our progress to build a healthier e-commerce business as we add new brands, improve product mix, growth the marketplace, and achieve more fixed cost leverage.”
Walmart's comp sales at U.S. stores jumped 9.3% to $93.3 billion during Q2, compared to a similar stretch last year, led by strength in general merchandise and food. Walmart’s earnings easily blew past Street estimates; income totaled $6.48 billion, or $2.27 per share, in the quarter, up from $3.61 billion, or $1.26 per share, in the year-ago period.
“There were several tailwinds affecting our Q2 performance, including government stimulus, more people eating at home, a focus by customers on entertaining themselves at home, and investing in their homes and yards,” noted McMillon. “We also had some headwinds including reduced store hours and out-of-stocks. As the benefits from stimulus waned towards the end of the quarter, we saw our comp sales settle into a normal range.”
Walmart also noted that its stores and online merchant teams are now integrated, which it expects will produce benefits going forward.
The retailer’s Sam's Club chain saw comp sales increase 13.3% in Q2, compared to the same period last year and excluding fuel. Sam’s Club’s online sales grew 39%, with strong demand for direct-to-home delivery. The business showed broad strength across categories including food consumables and its member smart brand. Growth in membership income (7.8%) was the highest quarterly increase in more than five years and the club retailer saw its new member count jump more than 60%. New member signups and renewal rates were very strong, and plus member penetration was at a historically high-level.
Sam's Club also incurred incremental COVID-related expenses, said EVP and CFO Brett Biggs, but the around $100 million of additional costs was offset by strong gross margin, which resulted in Sam's operating income increasing more than 24% excluding fuel.
While Walmart did not provide FY 2021 guidance due to continued uncertainty around the health crisis, Biggs did note that the retailer saw stronger than expected sales in Q2 due in large part to stock buying and stimulus spending.
“But the duration extent of future government stimulus remains uncertain,” he cautioned. “In Q2, stimulus spending improved our sales mix, and in turn, gross margin and operating profit.”
Looking ahead to the holidays, John Furner, president and CEO of Walmart U.S., said Walmart is carefully thinking through each of the different holidays and how they may change as a result of what's happening.
“The team is really working on plans and contingency plans and making sure that we are ready for the customer any way they want to shop,” he said. “They've shifted purchasing online -- you can see that in our online results of 97% and with the growth of pickup -- we'll make sure that we're ready with both of these types of fulfilment options in addition to store shopping, so however the customer wants to shop, we will be ready.”