Walmart was out with its second quarter financial report yesterday, saying that its total revenue for the period was $161.6 billion, up 5.7 percent from the same period a year earlier.
US same-store sales were up 6.2 percent, while US e-commerce sales were up 24 percent.
Walmart’s Q2 net income was up 53 percent to $7.89 billion, compared with $5.15 billion a year earlier.
According to the company, "Customers visited Walmart’s stores and website more often and bought more when they did. Transactions increased by 2.9% and the average ticket rose by 3.4% for Walmart U.S."
Walmart International net sales were up 11 percent to $27 billion.
CNBC quotes Walmart CFO John David Rainey as saying that "Walmart saw 'modest improvement' in sales of big-ticket and discretionary items like electronics and home goods during the quarter. Sales of those products have been weaker for more than a year as Americans spend more on necessities like food.
"He said he feels better about spending patterns than he did three months ago. Yet he described the consumer as 'choiceful or discerning'."
Also from the CNBC story:
"Walmart has stood apart from other retailers such as Target, which have struggled with softer sales. It is better insulated from shoppers’ changing tastes and reactions to economic factors like high inflation because it sells more everyday staples as the nation’s largest grocer.
"Rainey said he continues to be surprised by consumers and their 'willingness to spend.' But he added they still want to to save money.
"Customers are buying more food from Walmart’s private brands, which typically cost less. In the grocery department at Walmart U.S., sales of private labels rose 9% year over year. Those brands make up 20% of Walmart’s total U.S. sales."
"Walmart has gained momentum with new revenue streams, too, including selling more advertisements and convincing more shoppers to sign up for its membership program, Walmart+. Those higher margin businesses are a major reason why CEO Doug McMillon has said he expects profits to grow faster than sales over the next five years. That upward trajectory continued in the most recent quarter. Sales for Walmart Connect, the company’s advertising business in the U.S., grew 36% year over year."
From the Wall Street Journal coverage:
"Consumers are facing pressure on their budgets from rising energy prices, the return of federal student-loan payments, higher borrowing costs and a drawdown in savings, said Chief Executive Doug McMillon on a call with analysts Thursday. Some of these trends are global, he said … Profits at the parent of Walmart and Sam’s Club got a boost, in part because last year the company heavily discounted items to clear inventory as early buying trends of the pandemic came to a swift halt."
- KC's View:
It does appear that Walmart's leadership team is doing pretty much everything right.
Challenges, of course, remain. Amazon remains a tough and innovative competitor. If the Kroger-Albertsons deal goes through, that combined company likely will be stronger. Who knows if the FTC or organized labor interests will turn their attention to the company? And, as Target has seen in recent months, unexpected events can dictate changes in consumer behavior and perception with which a retailer has to deal.
But there is little evidence that anybody at Walmart HQ is getting complacent.